Correlation Between Relay Therapeutics and Icosavax

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

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

Diversification Opportunities for Relay Therapeutics and Icosavax

0.0

Correlation Coefficient

Relay Therapeutics  Icosavax

Pay attention - limited upside

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

Pair Corralation between Relay Therapeutics and Icosavax

If you would invest (100.00) in Icosavax on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Icosavax or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Relay Therapeutics  vs.  Icosavax

Relay Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Relay Therapeutics 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.

Icosavax

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Relay Therapeutics and Icosavax

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

The idea behind Relay Therapeutics and Icosavax 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.