Correlation Between CureVac NV and Lixte Biotechnology

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

By analyzing existing cross correlation between CureVac NV and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on CureVac NV and Lixte Biotechnology 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 Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CureVac NV and Lixte Biotechnology.

Diversification Opportunities for CureVac NV and Lixte Biotechnology

0.74

Correlation Coefficient

CureVac NV  Lixte Biotechnology

Poor diversification

The 3 months correlation between CureVac and Lixte is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CureVac NV and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology 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 Lixte Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixte Biotechnology has no effect on the direction of CureVac NV i.e., CureVac NV and Lixte Biotechnology go up and down completely randomly.

Pair Corralation between CureVac NV and Lixte Biotechnology

Given the investment horizon of 90 days CureVac NV is expected to generate 0.74 times more return on investment than Lixte Biotechnology. However, CureVac NV is 1.36 times less risky than Lixte Biotechnology. It trades about 0.03 of its potential returns per unit of risk. Lixte Biotechnology Holdings is currently generating about -0.09 per unit of risk. If you would invest  299.00  in CureVac NV on December 19, 2024 and sell it today you would earn a total of  7.00  from holding CureVac NV or generate 2.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

CureVac NV  vs.  Lixte Biotechnology Holdings

CureVac NV

Risk-Adjusted Performance

Weak

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

Lixte Biotechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lixte Biotechnology Holdings 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 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.

Pair Trading with CureVac NV and Lixte Biotechnology

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

The idea behind CureVac NV and Lixte Biotechnology Holdings 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.