Correlation Between Chimerix and Hudson Pacific

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

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

Diversification Opportunities for Chimerix and Hudson Pacific

-0.06

Correlation Coefficient

Chimerix  Hudson Pacific

Good diversification

The 3 months correlation between Chimerix and Hudson is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chimerix and Hudson Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Pacific Properties and Chimerix 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 Chimerix are associated (or correlated) with Hudson Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Pacific Properties has no effect on the direction of Chimerix i.e., Chimerix and Hudson Pacific go up and down completely randomly.

Pair Corralation between Chimerix and Hudson Pacific

Given the investment horizon of 90 days Chimerix is expected to generate 2.24 times more return on investment than Hudson Pacific. However, Chimerix is 2.24 times more volatile than Hudson Pacific Properties. It trades about 0.19 of its potential returns per unit of risk. Hudson Pacific Properties is currently generating about 0.04 per unit of risk. If you would invest  344.00  in Chimerix on December 29, 2024 and sell it today you would earn a total of  506.00  from holding Chimerix or generate 147.09% return on investment over 90 days.

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

Chimerix  vs.  Hudson Pacific Properties

Chimerix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chimerix are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chimerix showed solid returns over the last few months and may actually be approaching a breakup point.

Hudson Pacific Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hudson Pacific Properties are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Hudson Pacific may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Chimerix and Hudson Pacific

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

The idea behind Chimerix and Hudson Pacific Properties 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.