Correlation Between Vaccinex and Baird Medical

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

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

Diversification Opportunities for Vaccinex and Baird Medical

-0.56

Correlation Coefficient

Vaccinex  Baird Medical

Excellent diversification

The 3 months correlation between Vaccinex and Baird is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Vaccinex and Baird Medical Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Medical Investment 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 Baird Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Medical Investment has no effect on the direction of Vaccinex i.e., Vaccinex and Baird Medical go up and down completely randomly.

Pair Corralation between Vaccinex and Baird Medical

Given the investment horizon of 90 days Vaccinex is expected to under-perform the Baird Medical. But the stock apears to be less risky and, when comparing its historical volatility, Vaccinex is 6.43 times less risky than Baird Medical. The stock trades about 0.0 of its potential returns per unit of risk. The Baird Medical Investment is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  380.00  in Baird Medical Investment on October 10, 2024 and sell it today you would earn a total of  385.00  from holding Baird Medical Investment or generate 101.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.32%
Values	Daily Returns

Vaccinex  vs.  Baird Medical Investment

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 fairly strong basic indicators, Vaccinex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Baird Medical Investment

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baird Medical Investment are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Baird Medical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vaccinex and Baird Medical

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

The idea behind Vaccinex and Baird Medical Investment 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.

Check out your portfolio center.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.