Correlation Between CureVac NV and Forte Biosciences

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

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

Diversification Opportunities for CureVac NV and Forte Biosciences

0.25

Correlation Coefficient

CureVac NV  Forte Biosciences

Modest diversification

The 3 months correlation between CureVac and Forte is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CureVac NV and Forte Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forte Biosciences and CureVac 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 CureVac NV are associated (or correlated) with Forte Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forte Biosciences has no effect on the direction of CureVac NV i.e., CureVac NV and Forte Biosciences go up and down completely randomly.

Pair Corralation between CureVac NV and Forte Biosciences

Given the investment horizon of 90 days CureVac NV is expected to generate 0.65 times more return on investment than Forte Biosciences. However, CureVac NV is 1.54 times less risky than Forte Biosciences. It trades about 0.04 of its potential returns per unit of risk. Forte Biosciences is currently generating about -0.2 per unit of risk. If you would invest  287.00  in CureVac NV on December 20, 2024 and sell it today you would earn a total of  17.00  from holding CureVac NV or generate 5.92% return on investment over 90 days.

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

CureVac NV  vs.  Forte Biosciences

CureVac NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CureVac NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, CureVac NV exhibited solid returns over the last few months and may actually be approaching a breakup point.

Forte Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forte Biosciences 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CureVac NV and Forte Biosciences

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

The idea behind CureVac NV and Forte Biosciences 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.