Correlation Between Affimed NV and Arbutus Biopharma

Can any of the company-specific risk be diversified away by investing in both Affimed NV and Arbutus Biopharma 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 Affimed NV and Arbutus Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Affimed NV and Arbutus Biopharma Corp, you can compare the effects of market volatilities on Affimed NV and Arbutus Biopharma 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 Affimed NV with a short position of Arbutus Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affimed NV and Arbutus Biopharma.

Diversification Opportunities for Affimed NV and Arbutus Biopharma

-0.14

Correlation Coefficient

Affimed NV  Arbutus Biopharma

Good diversification

The 3 months correlation between Affimed and Arbutus is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Affimed NV and Arbutus Biopharma Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbutus Biopharma Corp and Affimed NV 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 Affimed NV are associated (or correlated) with Arbutus Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbutus Biopharma Corp has no effect on the direction of Affimed NV i.e., Affimed NV and Arbutus Biopharma go up and down completely randomly.

Pair Corralation between Affimed NV and Arbutus Biopharma

Given the investment horizon of 90 days Affimed NV is expected to under-perform the Arbutus Biopharma. In addition to that, Affimed NV is 1.38 times more volatile than Arbutus Biopharma Corp. It trades about -0.2 of its total potential returns per unit of risk. Arbutus Biopharma Corp is currently generating about 0.03 per unit of volatility. If you would invest  320.00  in Arbutus Biopharma Corp on December 29, 2024 and sell it today you would earn a total of  7.00  from holding Arbutus Biopharma Corp or generate 2.19% return on investment over 90 days.

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

Affimed NV  vs.  Arbutus Biopharma Corp

Affimed NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Affimed NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Arbutus Biopharma Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arbutus Biopharma Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Arbutus Biopharma is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Affimed NV and Arbutus Biopharma

The main advantage of trading using opposite Affimed NV and Arbutus Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affimed NV position performs unexpectedly, Arbutus Biopharma 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 Arbutus Biopharma will offset losses from the drop in Arbutus Biopharma's long position.

The idea behind Affimed NV and Arbutus Biopharma Corp 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.