Correlation Between Vaxart and Sonnet Biotherapeutics

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

By analyzing existing cross correlation between Vaxart Inc and Sonnet Biotherapeutics Holdings, you can compare the effects of market volatilities on Vaxart and Sonnet Biotherapeutics 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 Sonnet Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaxart and Sonnet Biotherapeutics.

Diversification Opportunities for Vaxart and Sonnet Biotherapeutics

-0.22

Correlation Coefficient

Vaxart  Sonnet Biotherapeutics

Very good diversification

The 3 months correlation between Vaxart and Sonnet is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Vaxart Inc and Sonnet Biotherapeutics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonnet Biotherapeutics 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 Sonnet Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonnet Biotherapeutics has no effect on the direction of Vaxart i.e., Vaxart and Sonnet Biotherapeutics go up and down completely randomly.

Pair Corralation between Vaxart and Sonnet Biotherapeutics

Given the investment horizon of 90 days Vaxart Inc is expected to generate 0.97 times more return on investment than Sonnet Biotherapeutics. However, Vaxart Inc is 1.03 times less risky than Sonnet Biotherapeutics. It trades about 0.0 of its potential returns per unit of risk. Sonnet Biotherapeutics Holdings is currently generating about -0.08 per unit of risk. If you would invest  59.00  in Vaxart Inc on December 2, 2024 and sell it today you would lose (8.00) from holding Vaxart Inc or give up 13.56% of portfolio value over 90 days.

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

Vaxart Inc  vs.  Sonnet Biotherapeutics Holding

Vaxart Inc

Risk-Adjusted Performance

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 comparatively stable basic indicators, Vaxart is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Sonnet Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sonnet Biotherapeutics Holdings 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 very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Vaxart and Sonnet Biotherapeutics

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

The idea behind Vaxart Inc and Sonnet Biotherapeutics Holdings 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.