Correlation Between Viking Therapeutics and Intercept Pharmaceuticals

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

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

Diversification Opportunities for Viking Therapeutics and Intercept Pharmaceuticals

0.0

Correlation Coefficient

Viking Therapeutics  Intercept Pharmaceuticals

Pay attention - limited upside

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

Pair Corralation between Viking Therapeutics and Intercept Pharmaceuticals

If you would invest (100.00) in Intercept Pharmaceuticals on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Intercept Pharmaceuticals or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Viking Therapeutics  vs.  Intercept Pharmaceuticals

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.

Intercept Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intercept Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Intercept Pharmaceuticals is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Viking Therapeutics and Intercept Pharmaceuticals

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

The idea behind Viking Therapeutics and Intercept Pharmaceuticals 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.