Correlation Between PepGen and Scorpius Holdings

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

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

Diversification Opportunities for PepGen and Scorpius Holdings

0.62

Correlation Coefficient

PepGen  Scorpius Holdings

Poor diversification

The 3 months correlation between PepGen and Scorpius is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Scorpius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scorpius Holdings 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 Scorpius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scorpius Holdings has no effect on the direction of PepGen i.e., PepGen and Scorpius Holdings go up and down completely randomly.

Pair Corralation between PepGen and Scorpius Holdings

Given the investment horizon of 90 days PepGen is expected to under-perform the Scorpius Holdings. But the stock apears to be less risky and, when comparing its historical volatility, PepGen is 3.42 times less risky than Scorpius Holdings. The stock trades about -0.37 of its potential returns per unit of risk. The Scorpius Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  46.00  in Scorpius Holdings on October 6, 2024 and sell it today you would earn a total of  9.00  from holding Scorpius Holdings or generate 19.57% return on investment over 90 days.

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

PepGen  vs.  Scorpius Holdings

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.

Scorpius Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scorpius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Scorpius Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PepGen and Scorpius Holdings

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

The idea behind PepGen and Scorpius Holdings 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.