Correlation Between PepGen and Pharvaris

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

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

Diversification Opportunities for PepGen and Pharvaris

0.39

Correlation Coefficient

PepGen  Pharvaris

Weak diversification

The 3 months correlation between PepGen and Pharvaris is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Pharvaris BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharvaris BV 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 Pharvaris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharvaris BV has no effect on the direction of PepGen i.e., PepGen and Pharvaris go up and down completely randomly.

Pair Corralation between PepGen and Pharvaris

Given the investment horizon of 90 days PepGen is expected to under-perform the Pharvaris. In addition to that, PepGen is 5.04 times more volatile than Pharvaris BV. It trades about -0.04 of its total potential returns per unit of risk. Pharvaris BV is currently generating about -0.09 per unit of volatility. If you would invest  1,902  in Pharvaris BV on December 30, 2024 and sell it today you would lose (322.00) from holding Pharvaris BV or give up 16.93% of portfolio value over 90 days.

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

PepGen  vs.  Pharvaris BV

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.

Pharvaris BV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pharvaris BV 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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with PepGen and Pharvaris

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

The idea behind PepGen and Pharvaris BV 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.