Correlation Between Pharvaris and MacroGenics

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

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

Diversification Opportunities for Pharvaris and MacroGenics

0.78

Correlation Coefficient

Pharvaris  MacroGenics

Poor diversification

The 3 months correlation between Pharvaris and MacroGenics is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pharvaris BV and MacroGenics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MacroGenics and Pharvaris 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 Pharvaris BV are associated (or correlated) with MacroGenics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MacroGenics has no effect on the direction of Pharvaris i.e., Pharvaris and MacroGenics go up and down completely randomly.

Pair Corralation between Pharvaris and MacroGenics

Given the investment horizon of 90 days Pharvaris BV is expected to generate 0.78 times more return on investment than MacroGenics. However, Pharvaris BV is 1.29 times less risky than MacroGenics. It trades about -0.1 of its potential returns per unit of risk. MacroGenics is currently generating about -0.19 per unit of risk. If you would invest  1,893  in Pharvaris BV on December 23, 2024 and sell it today you would lose (353.00) from holding Pharvaris BV or give up 18.65% of portfolio value over 90 days.

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

Pharvaris BV  vs.  MacroGenics

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.

MacroGenics

Risk-Adjusted Performance

Very Weak

Over the last 90 days MacroGenics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Pharvaris and MacroGenics

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

The idea behind Pharvaris BV and MacroGenics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.