Correlation Between Virtus LifeSci and CNHX

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Can any of the company-specific risk be diversified away by investing in both Virtus LifeSci and CNHX 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 Virtus LifeSci and CNHX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus LifeSci Biotech and CNHX, you can compare the effects of market volatilities on Virtus LifeSci and CNHX 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 Virtus LifeSci with a short position of CNHX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus LifeSci and CNHX.

Diversification Opportunities for Virtus LifeSci and CNHX

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Virtus and CNHX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virtus LifeSci Biotech and CNHX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNHX and Virtus LifeSci 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 Virtus LifeSci Biotech are associated (or correlated) with CNHX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNHX has no effect on the direction of Virtus LifeSci i.e., Virtus LifeSci and CNHX go up and down completely randomly.

Pair Corralation between Virtus LifeSci and CNHX

If you would invest  5,300  in Virtus LifeSci Biotech on December 29, 2023 and sell it today you would earn a total of  361.00  from holding Virtus LifeSci Biotech or generate 6.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Virtus LifeSci Biotech  vs.  CNHX

 Performance 
       Timeline  
Virtus LifeSci Biotech 

Risk-Adjusted Performance

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Over the last 90 days Virtus LifeSci Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Virtus LifeSci is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
CNHX 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days CNHX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, CNHX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus LifeSci and CNHX Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Virtus LifeSci and CNHX

The main advantage of trading using opposite Virtus LifeSci and CNHX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus LifeSci position performs unexpectedly, CNHX 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 CNHX will offset losses from the drop in CNHX's long position.
The idea behind Virtus LifeSci Biotech and CNHX 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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