Correlation Between Equillium and Vaxart

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

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

Diversification Opportunities for Equillium and Vaxart

0.16

Correlation Coefficient

Equillium  Vaxart

Average diversification

The 3 months correlation between Equillium and Vaxart is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Vaxart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxart Inc and Equillium 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 Equillium are associated (or correlated) with Vaxart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaxart Inc has no effect on the direction of Equillium i.e., Equillium and Vaxart go up and down completely randomly.

Pair Corralation between Equillium and Vaxart

Allowing for the 90-day total investment horizon Equillium is expected to generate 1.3 times more return on investment than Vaxart. However, Equillium is 1.3 times more volatile than Vaxart Inc. It trades about 0.03 of its potential returns per unit of risk. Vaxart Inc is currently generating about 0.01 per unit of risk. If you would invest  80.00  in Equillium on December 2, 2024 and sell it today you would lose (4.00) from holding Equillium or give up 5.0% of portfolio value over 90 days.

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

Equillium  vs.  Vaxart Inc

Equillium

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Equillium are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Equillium reported solid returns over the last few months and may actually be approaching a breakup point.

Vaxart Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vaxart Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vaxart is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Equillium and Vaxart

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

The idea behind Equillium and Vaxart Inc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.