Correlation Between Altimmune and Cassava Sciences

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

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

Diversification Opportunities for Altimmune and Cassava Sciences

-0.72

Correlation Coefficient

Altimmune  Cassava Sciences

Pay attention - limited upside

The 3 months correlation between Altimmune and Cassava is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Altimmune and Cassava Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cassava Sciences and Altimmune 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 Altimmune are associated (or correlated) with Cassava Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cassava Sciences has no effect on the direction of Altimmune i.e., Altimmune and Cassava Sciences go up and down completely randomly.

Pair Corralation between Altimmune and Cassava Sciences

Considering the 90-day investment horizon Altimmune is expected to generate 0.26 times more return on investment than Cassava Sciences. However, Altimmune is 3.91 times less risky than Cassava Sciences. It trades about -0.03 of its potential returns per unit of risk. Cassava Sciences is currently generating about -0.37 per unit of risk. If you would invest  868.00  in Altimmune on September 23, 2024 and sell it today you would lose (43.00) from holding Altimmune or give up 4.95% of portfolio value over 90 days.

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

Altimmune  vs.  Cassava Sciences

Altimmune

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altimmune are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent essential indicators, Altimmune unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cassava Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cassava Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Altimmune and Cassava Sciences

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

The idea behind Altimmune and Cassava Sciences 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.