Correlation Between PepGen and Avid Bioservices

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

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

Diversification Opportunities for PepGen and Avid Bioservices

-0.66

Correlation Coefficient

PepGen  Avid Bioservices

Excellent diversification

The 3 months correlation between PepGen and Avid is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Avid Bioservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avid Bioservices 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 Avid Bioservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avid Bioservices has no effect on the direction of PepGen i.e., PepGen and Avid Bioservices go up and down completely randomly.

Pair Corralation between PepGen and Avid Bioservices

Given the investment horizon of 90 days PepGen is expected to under-perform the Avid Bioservices. In addition to that, PepGen is 81.1 times more volatile than Avid Bioservices. It trades about -0.04 of its total potential returns per unit of risk. Avid Bioservices is currently generating about 0.28 per unit of volatility. If you would invest  1,233  in Avid Bioservices on December 28, 2024 and sell it today you would earn a total of  16.00  from holding Avid Bioservices or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	41.67%
Values	Daily Returns

PepGen  vs.  Avid Bioservices

PepGen

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Avid Bioservices

Risk-Adjusted Performance

Solid

Over the last 90 days Avid Bioservices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Avid Bioservices is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PepGen and Avid Bioservices

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

The idea behind PepGen and Avid Bioservices 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.