Correlation Between SIGA Technologies and Viatris

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

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

Diversification Opportunities for SIGA Technologies and Viatris

0.64

Correlation Coefficient

SIGA Technologies  Viatris

Poor diversification

The 3 months correlation between SIGA and Viatris is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SIGA Technologies and Viatris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viatris and SIGA Technologies 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 SIGA Technologies are associated (or correlated) with Viatris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viatris has no effect on the direction of SIGA Technologies i.e., SIGA Technologies and Viatris go up and down completely randomly.

Pair Corralation between SIGA Technologies and Viatris

Given the investment horizon of 90 days SIGA Technologies is expected to generate 1.07 times more return on investment than Viatris. However, SIGA Technologies is 1.07 times more volatile than Viatris. It trades about -0.03 of its potential returns per unit of risk. Viatris is currently generating about -0.21 per unit of risk. If you would invest  592.00  in SIGA Technologies on December 28, 2024 and sell it today you would lose (35.00) from holding SIGA Technologies or give up 5.91% of portfolio value over 90 days.

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

SIGA Technologies  vs.  Viatris

SIGA Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days SIGA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, SIGA Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Viatris

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viatris has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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.

Pair Trading with SIGA Technologies and Viatris

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

The idea behind SIGA Technologies and Viatris 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.