Correlation Between CVRx and Werewolf Therapeutics

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

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

Diversification Opportunities for CVRx and Werewolf Therapeutics

-0.06

Correlation Coefficient

CVRx  Werewolf Therapeutics

Good diversification

The 3 months correlation between CVRx and Werewolf is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding CVRx Inc and Werewolf Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werewolf Therapeutics and CVRx 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 CVRx Inc are associated (or correlated) with Werewolf Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werewolf Therapeutics has no effect on the direction of CVRx i.e., CVRx and Werewolf Therapeutics go up and down completely randomly.

Pair Corralation between CVRx and Werewolf Therapeutics

Given the investment horizon of 90 days CVRx is expected to generate 1.14 times less return on investment than Werewolf Therapeutics. In addition to that, CVRx is 1.22 times more volatile than Werewolf Therapeutics. It trades about 0.1 of its total potential returns per unit of risk. Werewolf Therapeutics is currently generating about 0.14 per unit of volatility. If you would invest  90.00  in Werewolf Therapeutics on April 24, 2025 and sell it today you would earn a total of  49.00  from holding Werewolf Therapeutics or generate 54.44% return on investment over 90 days.

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

CVRx Inc  vs.  Werewolf Therapeutics

CVRx Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVRx Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, CVRx showed solid returns over the last few months and may actually be approaching a breakup point.

Werewolf Therapeutics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Werewolf Therapeutics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Werewolf Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVRx and Werewolf Therapeutics

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

The idea behind CVRx Inc and Werewolf 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.