Correlation Between Vaxart and Larimar Therapeutics

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

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

Diversification Opportunities for Vaxart and Larimar Therapeutics

0.28

Correlation Coefficient

Vaxart  Larimar Therapeutics

Modest diversification

The 3 months correlation between Vaxart and Larimar is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vaxart Inc and Larimar Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Larimar Therapeutics and Vaxart 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 Vaxart Inc are associated (or correlated) with Larimar Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Larimar Therapeutics has no effect on the direction of Vaxart i.e., Vaxart and Larimar Therapeutics go up and down completely randomly.

Pair Corralation between Vaxart and Larimar Therapeutics

Given the investment horizon of 90 days Vaxart Inc is expected to under-perform the Larimar Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Vaxart Inc is 1.28 times less risky than Larimar Therapeutics. The stock trades about -0.17 of its potential returns per unit of risk. The Larimar Therapeutics is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  669.00  in Larimar Therapeutics on September 16, 2024 and sell it today you would lose (52.00) from holding Larimar Therapeutics or give up 7.77% of portfolio value over 90 days.

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

Vaxart Inc  vs.  Larimar Therapeutics

Vaxart Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vaxart Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Larimar Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Larimar Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Larimar Therapeutics is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Vaxart and Larimar Therapeutics

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

The idea behind Vaxart Inc and Larimar Therapeutics 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 Anywhere module to track or share privately all of your investments from the convenience of any device.