Correlation Between Vifor Pharma and CPENPO CPEN

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

By analyzing existing cross correlation between Vifor Pharma AG and CPENPO CPEN P, you can compare the effects of market volatilities on Vifor Pharma and CPENPO CPEN 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 Vifor Pharma with a short position of CPENPO CPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vifor Pharma and CPENPO CPEN.

Diversification Opportunities for Vifor Pharma and CPENPO CPEN

0.0

Correlation Coefficient

Vifor Pharma  CPENPO CPEN

Pay attention - limited upside

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

Pair Corralation between Vifor Pharma and CPENPO CPEN

If you would invest (100.00) in CPENPO CPEN P on October 8, 2024 and sell it today you would earn a total of  100.00  from holding CPENPO CPEN P or generate -100.0% return on investment over 90 days.

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

Vifor Pharma AG  vs.  CPENPO CPEN P

Vifor Pharma AG

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Vifor Pharma AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vifor Pharma is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

CPENPO CPEN P

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vifor Pharma and CPENPO CPEN

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

The idea behind Vifor Pharma AG and CPENPO CPEN P 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.