Correlation Between Viking Therapeutics and Alumis Common

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

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

Diversification Opportunities for Viking Therapeutics and Alumis Common

0.83

Correlation Coefficient

Viking Therapeutics  Alumis Common

Very poor diversification

The 3 months correlation between Viking and Alumis is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Alumis Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumis Common Stock and Viking 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 Viking Therapeutics are associated (or correlated) with Alumis Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumis Common Stock has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and Alumis Common go up and down completely randomly.

Pair Corralation between Viking Therapeutics and Alumis Common

Given the investment horizon of 90 days Viking Therapeutics is expected to under-perform the Alumis Common. But the stock apears to be less risky and, when comparing its historical volatility, Viking Therapeutics is 1.15 times less risky than Alumis Common. The stock trades about -0.26 of its potential returns per unit of risk. The Alumis Common Stock is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  1,199  in Alumis Common Stock on September 26, 2024 and sell it today you would lose (362.00) from holding Alumis Common Stock or give up 30.19% of portfolio value over 90 days.

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

Viking Therapeutics  vs.  Alumis Common Stock

Viking Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viking Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Alumis Common Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alumis Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Viking Therapeutics and Alumis Common

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

The idea behind Viking Therapeutics and Alumis Common Stock 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.