Correlation Between Vericel Corp and Altimmune

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

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

Diversification Opportunities for Vericel Corp and Altimmune

0.9

Correlation Coefficient

Vericel Corp  Altimmune

Almost no diversification

The 3 months correlation between Vericel and Altimmune is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Altimmune in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimmune and Vericel Corp 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 Vericel Corp Ord are associated (or correlated) with Altimmune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimmune has no effect on the direction of Vericel Corp i.e., Vericel Corp and Altimmune go up and down completely randomly.

Pair Corralation between Vericel Corp and Altimmune

Given the investment horizon of 90 days Vericel Corp Ord is expected to under-perform the Altimmune. But the stock apears to be less risky and, when comparing its historical volatility, Vericel Corp Ord is 3.39 times less risky than Altimmune. The stock trades about -0.15 of its potential returns per unit of risk. The Altimmune is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  868.00  in Altimmune on September 23, 2024 and sell it today you would lose (43.00) from holding Altimmune or give up 4.95% of portfolio value over 90 days.

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

Vericel Corp Ord  vs.  Altimmune

Vericel Corp Ord

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vericel Corp Ord are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Vericel Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Altimmune

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altimmune are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent essential indicators, Altimmune unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vericel Corp and Altimmune

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

The idea behind Vericel Corp Ord and Altimmune 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.