Correlation Between VTv Therapeutics and Bio Techne

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

By analyzing existing cross correlation between vTv Therapeutics and Bio Techne Corp, you can compare the effects of market volatilities on VTv Therapeutics and Bio Techne 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 VTv Therapeutics with a short position of Bio Techne. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTv Therapeutics and Bio Techne.

Diversification Opportunities for VTv Therapeutics and Bio Techne

-0.53

Correlation Coefficient

VTv Therapeutics  Bio Techne

Excellent diversification

The 3 months correlation between VTv and Bio is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding vTv Therapeutics and Bio Techne Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Techne Corp and VTv 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 vTv Therapeutics are associated (or correlated) with Bio Techne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Techne Corp has no effect on the direction of VTv Therapeutics i.e., VTv Therapeutics and Bio Techne go up and down completely randomly.

Pair Corralation between VTv Therapeutics and Bio Techne

Given the investment horizon of 90 days vTv Therapeutics is expected to generate 1.78 times more return on investment than Bio Techne. However, VTv Therapeutics is 1.78 times more volatile than Bio Techne Corp. It trades about 0.04 of its potential returns per unit of risk. Bio Techne Corp is currently generating about 0.05 per unit of risk. If you would invest  1,538  in vTv Therapeutics on September 3, 2024 and sell it today you would earn a total of  66.00  from holding vTv Therapeutics or generate 4.29% return on investment over 90 days.

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

vTv Therapeutics  vs.  Bio Techne Corp

vTv Therapeutics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in vTv Therapeutics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, VTv Therapeutics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bio Techne Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Techne Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Bio Techne may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VTv Therapeutics and Bio Techne

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

The idea behind vTv Therapeutics and Bio Techne Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.