Correlation Between InMed Pharmaceuticals and Vaxart

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

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

Diversification Opportunities for InMed Pharmaceuticals and Vaxart

0.74

Correlation Coefficient

InMed Pharmaceuticals  Vaxart

Poor diversification

The 3 months correlation between InMed and Vaxart is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding InMed Pharmaceuticals and Vaxart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxart Inc and InMed Pharmaceuticals 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 InMed Pharmaceuticals 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 InMed Pharmaceuticals i.e., InMed Pharmaceuticals and Vaxart go up and down completely randomly.

Pair Corralation between InMed Pharmaceuticals and Vaxart

Considering the 90-day investment horizon InMed Pharmaceuticals is expected to under-perform the Vaxart. But the stock apears to be less risky and, when comparing its historical volatility, InMed Pharmaceuticals is 1.54 times less risky than Vaxart. The stock trades about -0.17 of its potential returns per unit of risk. The Vaxart Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  61.00  in Vaxart Inc on December 26, 2024 and sell it today you would lose (15.00) from holding Vaxart Inc or give up 24.59% of portfolio value over 90 days.

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

InMed Pharmaceuticals  vs.  Vaxart Inc

InMed Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days InMed Pharmaceuticals 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 very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with InMed Pharmaceuticals and Vaxart

The main advantage of trading using opposite InMed Pharmaceuticals and Vaxart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMed Pharmaceuticals 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 InMed Pharmaceuticals 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.