Correlation Between Reviva Pharmaceuticals and Chimerix

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

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

Diversification Opportunities for Reviva Pharmaceuticals and Chimerix

0.76

Correlation Coefficient

Reviva Pharmaceuticals  Chimerix

Poor diversification

The 3 months correlation between Reviva and Chimerix is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Reviva Pharmaceuticals Holding and Chimerix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimerix and Reviva Pharmaceuticals 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 Reviva Pharmaceuticals Holdings are associated (or correlated) with Chimerix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimerix has no effect on the direction of Reviva Pharmaceuticals i.e., Reviva Pharmaceuticals and Chimerix go up and down completely randomly.

Pair Corralation between Reviva Pharmaceuticals and Chimerix

Given the investment horizon of 90 days Reviva Pharmaceuticals is expected to generate 2.02 times less return on investment than Chimerix. But when comparing it to its historical volatility, Reviva Pharmaceuticals Holdings is 3.26 times less risky than Chimerix. It trades about 0.21 of its potential returns per unit of risk. Chimerix is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  87.00  in Chimerix on September 12, 2024 and sell it today you would earn a total of  212.00  from holding Chimerix or generate 243.68% return on investment over 90 days.

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

Reviva Pharmaceuticals Holding  vs.  Chimerix

Reviva Pharmaceuticals

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Reviva Pharmaceuticals Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Reviva Pharmaceuticals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Chimerix

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chimerix are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chimerix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Reviva Pharmaceuticals and Chimerix

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

The idea behind Reviva Pharmaceuticals Holdings and Chimerix 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.