Correlation Between Viking Therapeutics and Exelixis

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

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

Diversification Opportunities for Viking Therapeutics and Exelixis

-0.59

Correlation Coefficient

Viking Therapeutics  Exelixis

Excellent diversification

The 3 months correlation between Viking and Exelixis is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Exelixis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelixis 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 Exelixis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelixis has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and Exelixis go up and down completely randomly.

Pair Corralation between Viking Therapeutics and Exelixis

Given the investment horizon of 90 days Viking Therapeutics is expected to under-perform the Exelixis. In addition to that, Viking Therapeutics is 1.99 times more volatile than Exelixis. It trades about -0.13 of its total potential returns per unit of risk. Exelixis is currently generating about 0.07 per unit of volatility. If you would invest  3,370  in Exelixis on December 29, 2024 and sell it today you would earn a total of  300.00  from holding Exelixis or generate 8.9% return on investment over 90 days.

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

Viking Therapeutics  vs.  Exelixis

Viking Therapeutics

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Exelixis

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Exelixis are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Exelixis may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Viking Therapeutics and Exelixis

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

The idea behind Viking Therapeutics and Exelixis 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.