Correlation Between Viking Therapeutics and Icosavax

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

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

Diversification Opportunities for Viking Therapeutics and Icosavax

0.2

Correlation Coefficient

Viking Therapeutics  Icosavax

Modest diversification

The 3 months correlation between Viking and Icosavax is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Icosavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icosavax 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 Icosavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icosavax has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and Icosavax go up and down completely randomly.

Pair Corralation between Viking Therapeutics and Icosavax

If you would invest  902.00  in Icosavax on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Icosavax or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Viking Therapeutics  vs.  Icosavax

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 fairly strong basic indicators, Viking Therapeutics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Icosavax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Icosavax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Icosavax is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Viking Therapeutics and Icosavax

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

The idea behind Viking Therapeutics and Icosavax 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.