Correlation Between Virpax Pharmaceuticals and Awakn Life

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

By analyzing existing cross correlation between Virpax Pharmaceuticals and Awakn Life Sciences, you can compare the effects of market volatilities on Virpax Pharmaceuticals and Awakn Life 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 Virpax Pharmaceuticals with a short position of Awakn Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virpax Pharmaceuticals and Awakn Life.

Diversification Opportunities for Virpax Pharmaceuticals and Awakn Life

0.64

Correlation Coefficient

Virpax Pharmaceuticals  Awakn Life

Poor diversification

The 3 months correlation between Virpax and Awakn is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Virpax Pharmaceuticals and Awakn Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awakn Life Sciences and Virpax Pharmaceuticals 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 Virpax Pharmaceuticals are associated (or correlated) with Awakn Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awakn Life Sciences has no effect on the direction of Virpax Pharmaceuticals i.e., Virpax Pharmaceuticals and Awakn Life go up and down completely randomly.

Pair Corralation between Virpax Pharmaceuticals and Awakn Life

Given the investment horizon of 90 days Virpax Pharmaceuticals is expected to generate 2.54 times more return on investment than Awakn Life. However, Virpax Pharmaceuticals is 2.54 times more volatile than Awakn Life Sciences. It trades about -0.01 of its potential returns per unit of risk. Awakn Life Sciences is currently generating about -0.19 per unit of risk. If you would invest  44.00  in Virpax Pharmaceuticals on October 4, 2024 and sell it today you would lose (6.00) from holding Virpax Pharmaceuticals or give up 13.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Virpax Pharmaceuticals  vs.  Awakn Life Sciences

Virpax Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virpax Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Awakn Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Awakn Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Awakn Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Virpax Pharmaceuticals and Awakn Life

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

The idea behind Virpax Pharmaceuticals and Awakn Life Sciences 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.