Correlation Between Bolt Biotherapeutics and Vincerx Pharma

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

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

Diversification Opportunities for Bolt Biotherapeutics and Vincerx Pharma

0.63

Correlation Coefficient

Bolt Biotherapeutics  Vincerx Pharma

Poor diversification

The 3 months correlation between Bolt and Vincerx is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Biotherapeutics and Vincerx Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincerx Pharma and Bolt Biotherapeutics 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 Bolt Biotherapeutics are associated (or correlated) with Vincerx Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincerx Pharma has no effect on the direction of Bolt Biotherapeutics i.e., Bolt Biotherapeutics and Vincerx Pharma go up and down completely randomly.

Pair Corralation between Bolt Biotherapeutics and Vincerx Pharma

Given the investment horizon of 90 days Bolt Biotherapeutics is expected to generate 0.4 times more return on investment than Vincerx Pharma. However, Bolt Biotherapeutics is 2.51 times less risky than Vincerx Pharma. It trades about -0.11 of its potential returns per unit of risk. Vincerx Pharma is currently generating about -0.42 per unit of risk. If you would invest  57.00  in Bolt Biotherapeutics on December 28, 2024 and sell it today you would lose (13.00) from holding Bolt Biotherapeutics or give up 22.81% of portfolio value over 90 days.

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

Bolt Biotherapeutics  vs.  Vincerx Pharma

Bolt Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bolt Biotherapeutics 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 essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Vincerx Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vincerx Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic 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.

Pair Trading with Bolt Biotherapeutics and Vincerx Pharma

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

The idea behind Bolt Biotherapeutics and Vincerx Pharma 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.