Correlation Between VectivBio Holding and PTC Therapeutics

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

By analyzing existing cross correlation between VectivBio Holding AG and PTC Therapeutics, you can compare the effects of market volatilities on VectivBio Holding and PTC Therapeutics 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 VectivBio Holding with a short position of PTC Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of VectivBio Holding and PTC Therapeutics.

Diversification Opportunities for VectivBio Holding and PTC Therapeutics

0.0

Correlation Coefficient

VectivBio Holding  PTC Therapeutics

Pay attention - limited upside

The 3 months correlation between VectivBio and PTC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VectivBio Holding AG and PTC Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC Therapeutics and VectivBio Holding 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 VectivBio Holding AG are associated (or correlated) with PTC Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC Therapeutics has no effect on the direction of VectivBio Holding i.e., VectivBio Holding and PTC Therapeutics go up and down completely randomly.

Pair Corralation between VectivBio Holding and PTC Therapeutics

If you would invest  4,577  in PTC Therapeutics on December 28, 2024 and sell it today you would earn a total of  847.00  from holding PTC Therapeutics or generate 18.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

VectivBio Holding AG  vs.  PTC Therapeutics

VectivBio Holding

Risk-Adjusted Performance

Very Weak

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

PTC Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Therapeutics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, PTC Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VectivBio Holding and PTC Therapeutics

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

The idea behind VectivBio Holding AG and PTC Therapeutics 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.