Correlation Between Virax Biolabs and Equillium

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

By analyzing existing cross correlation between Virax Biolabs Group and Equillium, you can compare the effects of market volatilities on Virax Biolabs and Equillium 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 Virax Biolabs with a short position of Equillium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virax Biolabs and Equillium.

Diversification Opportunities for Virax Biolabs and Equillium

-0.15

Correlation Coefficient

Virax Biolabs  Equillium

Good diversification

The 3 months correlation between Virax and Equillium is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Virax Biolabs Group and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium and Virax Biolabs 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 Virax Biolabs Group are associated (or correlated) with Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Virax Biolabs i.e., Virax Biolabs and Equillium go up and down completely randomly.

Pair Corralation between Virax Biolabs and Equillium

Given the investment horizon of 90 days Virax Biolabs Group is expected to under-perform the Equillium. In addition to that, Virax Biolabs is 1.18 times more volatile than Equillium. It trades about -0.06 of its total potential returns per unit of risk. Equillium is currently generating about 0.11 per unit of volatility. If you would invest  60.00  in Equillium on December 21, 2024 and sell it today you would earn a total of  20.00  from holding Equillium or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Virax Biolabs Group  vs.  Equillium

Virax Biolabs Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virax Biolabs Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal 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.

Equillium

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Equillium are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Equillium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Virax Biolabs and Equillium

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

The idea behind Virax Biolabs Group and Equillium 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.