Correlation Between CureVac NV and Vir Biotechnology

Can any of the company-specific risk be diversified away by investing in both CureVac NV and Vir 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 Vir 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 Vir Biotechnology, you can compare the effects of market volatilities on CureVac NV and Vir 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 Vir Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CureVac NV and Vir Biotechnology.

Diversification Opportunities for CureVac NV and Vir Biotechnology

0.05

Correlation Coefficient

CureVac NV  Vir Biotechnology

Significant diversification

The 3 months correlation between CureVac and Vir is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CureVac NV and Vir Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vir 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 Vir Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vir Biotechnology has no effect on the direction of CureVac NV i.e., CureVac NV and Vir Biotechnology go up and down completely randomly.

Pair Corralation between CureVac NV and Vir Biotechnology

Given the investment horizon of 90 days CureVac NV is expected to generate 0.88 times more return on investment than Vir Biotechnology. However, CureVac NV is 1.14 times less risky than Vir Biotechnology. It trades about -0.01 of its potential returns per unit of risk. Vir Biotechnology is currently generating about -0.02 per unit of risk. If you would invest  333.00  in CureVac NV on September 27, 2024 and sell it today you would lose (34.00) from holding CureVac NV or give up 10.21% of portfolio value over 90 days.

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

CureVac NV  vs.  Vir Biotechnology

CureVac NV

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CureVac NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CureVac NV is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Vir Biotechnology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vir Biotechnology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, Vir Biotechnology is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with CureVac NV and Vir Biotechnology

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

The idea behind CureVac NV and Vir Biotechnology 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 Stocks Directory module to find actively traded stocks across global markets.