Correlation Between Vaxxinity and Evelo Biosciences

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

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

Diversification Opportunities for Vaxxinity and Evelo Biosciences

0.0

Correlation Coefficient

Vaxxinity  Evelo Biosciences

Pay attention - limited upside

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

Pair Corralation between Vaxxinity and Evelo Biosciences

If you would invest (100.00) in Evelo Biosciences on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Evelo Biosciences or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vaxxinity  vs.  Evelo Biosciences

Vaxxinity

Risk-Adjusted Performance

Very Weak

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

Evelo Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evelo Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Evelo Biosciences is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vaxxinity and Evelo Biosciences

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

The idea behind Vaxxinity and Evelo Biosciences 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.