Correlation Between Vaccinex and Alx Oncology

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

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

Diversification Opportunities for Vaccinex and Alx Oncology

-0.33

Correlation Coefficient

Vaccinex  Alx Oncology

Very good diversification

The 3 months correlation between Vaccinex and Alx is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Vaccinex and Alx Oncology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alx Oncology Holdings and Vaccinex 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 Vaccinex are associated (or correlated) with Alx Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alx Oncology Holdings has no effect on the direction of Vaccinex i.e., Vaccinex and Alx Oncology go up and down completely randomly.

Pair Corralation between Vaccinex and Alx Oncology

Given the investment horizon of 90 days Vaccinex is expected to under-perform the Alx Oncology. In addition to that, Vaccinex is 1.17 times more volatile than Alx Oncology Holdings. It trades about -0.08 of its total potential returns per unit of risk. Alx Oncology Holdings is currently generating about -0.03 per unit of volatility. If you would invest  1,048  in Alx Oncology Holdings on September 29, 2024 and sell it today you would lose (886.00) from holding Alx Oncology Holdings or give up 84.54% of portfolio value over 90 days.

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

Vaccinex  vs.  Alx Oncology Holdings

Vaccinex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vaccinex 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 fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Alx Oncology Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vaccinex and Alx Oncology

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

The idea behind Vaccinex and Alx Oncology Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.