Correlation Between Vaccinex and Eyepoint Pharmaceuticals

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

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

Diversification Opportunities for Vaccinex and Eyepoint Pharmaceuticals

-0.29

Correlation Coefficient

Vaccinex  Eyepoint Pharmaceuticals

Very good diversification

The 3 months correlation between Vaccinex and Eyepoint is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Vaccinex and Eyepoint Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eyepoint Pharmaceuticals 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 Eyepoint Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eyepoint Pharmaceuticals has no effect on the direction of Vaccinex i.e., Vaccinex and Eyepoint Pharmaceuticals go up and down completely randomly.

Pair Corralation between Vaccinex and Eyepoint Pharmaceuticals

Given the investment horizon of 90 days Vaccinex is expected to under-perform the Eyepoint Pharmaceuticals. In addition to that, Vaccinex is 1.6 times more volatile than Eyepoint Pharmaceuticals. It trades about -0.01 of its total potential returns per unit of risk. Eyepoint Pharmaceuticals is currently generating about -0.01 per unit of volatility. If you would invest  910.00  in Eyepoint Pharmaceuticals on September 13, 2024 and sell it today you would lose (116.00) from holding Eyepoint Pharmaceuticals or give up 12.75% of portfolio value over 90 days.

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

Vaccinex  vs.  Eyepoint Pharmaceuticals

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.

Eyepoint Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eyepoint Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eyepoint Pharmaceuticals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vaccinex and Eyepoint Pharmaceuticals

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

The idea behind Vaccinex and Eyepoint Pharmaceuticals 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..