Correlation Between VBI Vaccines and Neutra Corp

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

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

Diversification Opportunities for VBI Vaccines and Neutra Corp

-0.58

Correlation Coefficient

VBI Vaccines  Neutra Corp

Excellent diversification

The 3 months correlation between VBI and Neutra is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding VBI Vaccines and Neutra Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neutra Corp and VBI Vaccines 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 VBI Vaccines are associated (or correlated) with Neutra Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neutra Corp has no effect on the direction of VBI Vaccines i.e., VBI Vaccines and Neutra Corp go up and down completely randomly.

Pair Corralation between VBI Vaccines and Neutra Corp

If you would invest  0.01  in Neutra Corp on September 30, 2024 and sell it today you would earn a total of  0.01  from holding Neutra Corp or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

VBI Vaccines  vs.  Neutra Corp

VBI Vaccines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VBI Vaccines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, VBI Vaccines is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Neutra Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neutra Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Neutra Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VBI Vaccines and Neutra Corp

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

The idea behind VBI Vaccines and Neutra Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.