Correlation Between Vaxxinity and LadRx

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

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

Diversification Opportunities for Vaxxinity and LadRx

-0.66

Correlation Coefficient

Vaxxinity  LadRx

Excellent diversification

The 3 months correlation between Vaxxinity and LadRx is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vaxxinity and LadRx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LadRx 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 LadRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LadRx has no effect on the direction of Vaxxinity i.e., Vaxxinity and LadRx go up and down completely randomly.

Pair Corralation between Vaxxinity and LadRx

Given the investment horizon of 90 days Vaxxinity is expected to generate 0.43 times more return on investment than LadRx. However, Vaxxinity is 2.32 times less risky than LadRx. It trades about 0.11 of its potential returns per unit of risk. LadRx is currently generating about 0.0 per unit of risk. If you would invest  143.00  in Vaxxinity on September 22, 2024 and sell it today you would earn a total of  129.00  from holding Vaxxinity or generate 90.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.29%
Values	Daily Returns

Vaxxinity  vs.  LadRx

Vaxxinity

Risk-Adjusted Performance

0 of 100

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.

LadRx

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vaxxinity and LadRx

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

The idea behind Vaxxinity and LadRx 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.