Correlation Between PepGen and Vg Life

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

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

Diversification Opportunities for PepGen and Vg Life

0.0

Correlation Coefficient

PepGen  Vg Life

Pay attention - limited upside

The 3 months correlation between PepGen and VGLS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Vg Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vg Life Sciences 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 Vg Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vg Life Sciences has no effect on the direction of PepGen i.e., PepGen and Vg Life go up and down completely randomly.

Pair Corralation between PepGen and Vg Life

Given the investment horizon of 90 days PepGen is expected to under-perform the Vg Life. But the stock apears to be less risky and, when comparing its historical volatility, PepGen is 51.49 times less risky than Vg Life. The stock trades about -0.14 of its potential returns per unit of risk. The Vg Life Sciences is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Vg Life Sciences on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Vg Life Sciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

PepGen  vs.  Vg Life Sciences

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

Vg Life Sciences

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vg Life Sciences are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Vg Life unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PepGen and Vg Life

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

The idea behind PepGen and Vg Life Sciences 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.