Correlation Between Vytrus Biotech and Squirrel Media

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

By analyzing existing cross correlation between Vytrus Biotech SA and Squirrel Media SA, you can compare the effects of market volatilities on Vytrus Biotech and Squirrel Media 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 Vytrus Biotech with a short position of Squirrel Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vytrus Biotech and Squirrel Media.

Diversification Opportunities for Vytrus Biotech and Squirrel Media

0.64

Correlation Coefficient

Vytrus Biotech  Squirrel Media

Poor diversification

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

Pair Corralation between Vytrus Biotech and Squirrel Media

Assuming the 90 days trading horizon Vytrus Biotech SA is expected to under-perform the Squirrel Media. In addition to that, Vytrus Biotech is 2.37 times more volatile than Squirrel Media SA. It trades about -0.12 of its total potential returns per unit of risk. Squirrel Media SA is currently generating about -0.1 per unit of volatility. If you would invest  148.00  in Squirrel Media SA on September 14, 2024 and sell it today you would lose (17.00) from holding Squirrel Media SA or give up 11.49% of portfolio value over 90 days.

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

Vytrus Biotech SA  vs.  Squirrel Media SA

Vytrus Biotech SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vytrus Biotech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Squirrel Media SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Squirrel Media SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Vytrus Biotech and Squirrel Media

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

The idea behind Vytrus Biotech SA and Squirrel Media SA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .