Correlation Between Rocky Mountain and CureVac NV

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

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

Diversification Opportunities for Rocky Mountain and CureVac NV

0.26

Correlation Coefficient

Rocky Mountain  CureVac NV

Modest diversification

The 3 months correlation between Rocky and CureVac is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Mountain Chocolate and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV and Rocky Mountain 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 Rocky Mountain Chocolate are associated (or correlated) with CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of Rocky Mountain i.e., Rocky Mountain and CureVac NV go up and down completely randomly.

Pair Corralation between Rocky Mountain and CureVac NV

Given the investment horizon of 90 days Rocky Mountain Chocolate is expected to under-perform the CureVac NV. But the stock apears to be less risky and, when comparing its historical volatility, Rocky Mountain Chocolate is 1.14 times less risky than CureVac NV. The stock trades about -0.2 of its potential returns per unit of risk. The CureVac NV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  299.00  in CureVac NV on December 19, 2024 and sell it today you would earn a total of  5.00  from holding CureVac NV or generate 1.67% return on investment over 90 days.

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

Rocky Mountain Chocolate  vs.  CureVac NV

Rocky Mountain Chocolate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rocky Mountain Chocolate 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 fundamental 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.

CureVac NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CureVac NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, CureVac NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Rocky Mountain and CureVac NV

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

The idea behind Rocky Mountain Chocolate and CureVac NV 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.