Correlation Between Analog Devices and CureVac NV

Can any of the company-specific risk be diversified away by investing in both Analog Devices and CureVac NV at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Analog Devices and CureVac NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Analog Devices and CureVac NV, you can compare the effects of market volatilities on Analog Devices and CureVac NV and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Analog Devices with a short position of CureVac NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and CureVac NV.

Diversification Opportunities for Analog Devices and CureVac NV

-0.11

Correlation Coefficient

Analog Devices  CureVac NV

Good diversification

The 3 months correlation between Analog and CureVac is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV and Analog Devices is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Analog Devices are associated (or correlated) with CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of Analog Devices i.e., Analog Devices and CureVac NV go up and down completely randomly.

Pair Corralation between Analog Devices and CureVac NV

Considering the 90-day investment horizon Analog Devices is expected to generate 0.43 times more return on investment than CureVac NV. However, Analog Devices is 2.34 times less risky than CureVac NV. It trades about 0.05 of its potential returns per unit of risk. CureVac NV is currently generating about -0.02 per unit of risk. If you would invest  15,933  in Analog Devices on October 11, 2024 and sell it today you would earn a total of  6,111  from holding Analog Devices or generate 38.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Analog Devices  vs.  CureVac NV

Analog Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Analog Devices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Analog Devices is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

CureVac NV

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CureVac NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, CureVac NV exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices and CureVac NV

The main advantage of trading using opposite Analog Devices and CureVac NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices position performs unexpectedly, CureVac NV can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CureVac NV will offset losses from the drop in CureVac NV's long position.

The idea behind Analog Devices and CureVac NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.