Correlation Between Immunocore Holdings and Vaxcyte

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

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

Diversification Opportunities for Immunocore Holdings and Vaxcyte

0.48

Correlation Coefficient

Immunocore Holdings  Vaxcyte

Very weak diversification

The 3 months correlation between Immunocore and Vaxcyte is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Immunocore Holdings and Vaxcyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxcyte and Immunocore Holdings 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 Immunocore Holdings are associated (or correlated) with Vaxcyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaxcyte has no effect on the direction of Immunocore Holdings i.e., Immunocore Holdings and Vaxcyte go up and down completely randomly.

Pair Corralation between Immunocore Holdings and Vaxcyte

Given the investment horizon of 90 days Immunocore Holdings is expected to generate 0.82 times more return on investment than Vaxcyte. However, Immunocore Holdings is 1.22 times less risky than Vaxcyte. It trades about 0.02 of its potential returns per unit of risk. Vaxcyte is currently generating about -0.07 per unit of risk. If you would invest  2,903  in Immunocore Holdings on December 30, 2024 and sell it today you would earn a total of  55.00  from holding Immunocore Holdings or generate 1.89% return on investment over 90 days.

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

Immunocore Holdings  vs.  Vaxcyte

Immunocore Holdings

Risk-Adjusted Performance

Weak

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

Vaxcyte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vaxcyte 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 Immunocore Holdings and Vaxcyte

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

The idea behind Immunocore Holdings and Vaxcyte 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.