Correlation Between Viking Therapeutics and GRAIL, LLC

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

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

Diversification Opportunities for Viking Therapeutics and GRAIL, LLC

-0.36

Correlation Coefficient

Viking Therapeutics  GRAIL, LLC

Very good diversification

The 3 months correlation between Viking and GRAIL, is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and GRAIL, LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRAIL, LLC 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 GRAIL, LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRAIL, LLC has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and GRAIL, LLC go up and down completely randomly.

Pair Corralation between Viking Therapeutics and GRAIL, LLC

Given the investment horizon of 90 days Viking Therapeutics is expected to under-perform the GRAIL, LLC. But the stock apears to be less risky and, when comparing its historical volatility, Viking Therapeutics is 1.99 times less risky than GRAIL, LLC. The stock trades about -0.18 of its potential returns per unit of risk. The GRAIL, LLC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,873  in GRAIL, LLC on December 2, 2024 and sell it today you would earn a total of  1,983  from holding GRAIL, LLC or generate 105.87% return on investment over 90 days.

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

Viking Therapeutics  vs.  GRAIL, LLC

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.

GRAIL, LLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GRAIL, LLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, GRAIL, LLC disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viking Therapeutics and GRAIL, LLC

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

The idea behind Viking Therapeutics and GRAIL, LLC 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 CEOs Directory module to screen CEOs from public companies around the world.