Correlation Between Orchestra BioMed and Chimerix

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

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

Diversification Opportunities for Orchestra BioMed and Chimerix

-0.75

Correlation Coefficient

Orchestra BioMed  Chimerix

Pay attention - limited upside

The 3 months correlation between Orchestra and Chimerix is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Orchestra BioMed Holdings and Chimerix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimerix and Orchestra BioMed 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 Orchestra BioMed Holdings are associated (or correlated) with Chimerix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimerix has no effect on the direction of Orchestra BioMed i.e., Orchestra BioMed and Chimerix go up and down completely randomly.

Pair Corralation between Orchestra BioMed and Chimerix

Given the investment horizon of 90 days Orchestra BioMed is expected to generate 7.61 times less return on investment than Chimerix. But when comparing it to its historical volatility, Orchestra BioMed Holdings is 1.51 times less risky than Chimerix. It trades about 0.04 of its potential returns per unit of risk. Chimerix is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  344.00  in Chimerix on December 29, 2024 and sell it today you would earn a total of  506.00  from holding Chimerix or generate 147.09% return on investment over 90 days.

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

Orchestra BioMed Holdings  vs.  Chimerix

Orchestra BioMed Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Orchestra BioMed Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Orchestra BioMed displayed solid returns over the last few months and may actually be approaching a breakup point.

Chimerix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chimerix are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chimerix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orchestra BioMed and Chimerix

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

The idea behind Orchestra BioMed Holdings and Chimerix 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.