Correlation Between ATAI Life and Vaccinex

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

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

Diversification Opportunities for ATAI Life and Vaccinex

0.26

Correlation Coefficient

ATAI Life  Vaccinex

Modest diversification

The 3 months correlation between ATAI and Vaccinex is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ATAI Life Sciences and Vaccinex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaccinex and ATAI Life 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 ATAI Life Sciences are associated (or correlated) with Vaccinex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaccinex has no effect on the direction of ATAI Life i.e., ATAI Life and Vaccinex go up and down completely randomly.

Pair Corralation between ATAI Life and Vaccinex

Given the investment horizon of 90 days ATAI Life Sciences is expected to under-perform the Vaccinex. But the stock apears to be less risky and, when comparing its historical volatility, ATAI Life Sciences is 1.29 times less risky than Vaccinex. The stock trades about -0.01 of its potential returns per unit of risk. The Vaccinex is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  333.00  in Vaccinex on September 13, 2024 and sell it today you would earn a total of  68.00  from holding Vaccinex or generate 20.42% return on investment over 90 days.

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

ATAI Life Sciences  vs.  Vaccinex

ATAI Life Sciences

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATAI Life Sciences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, ATAI Life demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Vaccinex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vaccinex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Vaccinex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ATAI Life and Vaccinex

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

The idea behind ATAI Life Sciences and Vaccinex 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.