Correlation Between PepGen and Altimmune

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

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

Diversification Opportunities for PepGen and Altimmune

-0.72

Correlation Coefficient

PepGen  Altimmune

Pay attention - limited upside

The 3 months correlation between PepGen and Altimmune is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Altimmune in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimmune and PepGen 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 PepGen are associated (or correlated) with Altimmune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimmune has no effect on the direction of PepGen i.e., PepGen and Altimmune go up and down completely randomly.

Pair Corralation between PepGen and Altimmune

Given the investment horizon of 90 days PepGen is expected to under-perform the Altimmune. In addition to that, PepGen is 1.18 times more volatile than Altimmune. It trades about -0.44 of its total potential returns per unit of risk. Altimmune is currently generating about -0.35 per unit of volatility. If you would invest  985.00  in Altimmune on October 5, 2024 and sell it today you would lose (264.00) from holding Altimmune or give up 26.8% of portfolio value over 90 days.

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

PepGen  vs.  Altimmune

PepGen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PepGen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Altimmune

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altimmune are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent essential indicators, Altimmune unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PepGen and Altimmune

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

The idea behind PepGen and Altimmune 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.