Correlation Between Vera Therapeutics and Yield10 Bioscience

Can any of the company-specific risk be diversified away by investing in both Vera Therapeutics and Yield10 Bioscience 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 Vera Therapeutics and Yield10 Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vera Therapeutics and Yield10 Bioscience, you can compare the effects of market volatilities on Vera Therapeutics and Yield10 Bioscience 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 Vera Therapeutics with a short position of Yield10 Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vera Therapeutics and Yield10 Bioscience.

Diversification Opportunities for Vera Therapeutics and Yield10 Bioscience

-0.41

Correlation Coefficient

Vera Therapeutics  Yield10 Bioscience

Very good diversification

The 3 months correlation between Vera and Yield10 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vera Therapeutics and Yield10 Bioscience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yield10 Bioscience and Vera Therapeutics 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 Vera Therapeutics are associated (or correlated) with Yield10 Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yield10 Bioscience has no effect on the direction of Vera Therapeutics i.e., Vera Therapeutics and Yield10 Bioscience go up and down completely randomly.

Pair Corralation between Vera Therapeutics and Yield10 Bioscience

Given the investment horizon of 90 days Vera Therapeutics is expected to generate 0.39 times more return on investment than Yield10 Bioscience. However, Vera Therapeutics is 2.59 times less risky than Yield10 Bioscience. It trades about 0.09 of its potential returns per unit of risk. Yield10 Bioscience is currently generating about -0.03 per unit of risk. If you would invest  855.00  in Vera Therapeutics on October 10, 2024 and sell it today you would earn a total of  3,355  from holding Vera Therapeutics or generate 392.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Vera Therapeutics  vs.  Yield10 Bioscience

Vera Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vera Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Vera Therapeutics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Yield10 Bioscience

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yield10 Bioscience are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Yield10 Bioscience displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vera Therapeutics and Yield10 Bioscience

The main advantage of trading using opposite Vera Therapeutics and Yield10 Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vera Therapeutics position performs unexpectedly, Yield10 Bioscience 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 Yield10 Bioscience will offset losses from the drop in Yield10 Bioscience's long position.

The idea behind Vera Therapeutics and Yield10 Bioscience 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.