Correlation Between Squirrel Media and Vytrus Biotech

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

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

Diversification Opportunities for Squirrel Media and Vytrus Biotech

0.64

Correlation Coefficient

Squirrel Media  Vytrus Biotech

Poor diversification

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

Pair Corralation between Squirrel Media and Vytrus Biotech

Assuming the 90 days trading horizon Squirrel Media SA is expected to under-perform the Vytrus Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Squirrel Media SA is 2.47 times less risky than Vytrus Biotech. The stock trades about -0.01 of its potential returns per unit of risk. The Vytrus Biotech SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  328.00  in Vytrus Biotech SA on September 14, 2024 and sell it today you would lose (108.00) from holding Vytrus Biotech SA or give up 32.93% of portfolio value over 90 days.

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

Squirrel Media SA  vs.  Vytrus Biotech SA

Squirrel Media SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Squirrel Media SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Vytrus Biotech SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vytrus Biotech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Squirrel Media and Vytrus Biotech

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

The idea behind Squirrel Media SA and Vytrus Biotech SA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.