Correlation Between Olema Pharmaceuticals and Vaxcyte

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

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

Diversification Opportunities for Olema Pharmaceuticals and Vaxcyte

-0.03

Correlation Coefficient

Olema Pharmaceuticals  Vaxcyte

Good diversification

The 3 months correlation between Olema and Vaxcyte is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Olema Pharmaceuticals and Vaxcyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxcyte and Olema Pharmaceuticals 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 Olema Pharmaceuticals are associated (or correlated) with Vaxcyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaxcyte has no effect on the direction of Olema Pharmaceuticals i.e., Olema Pharmaceuticals and Vaxcyte go up and down completely randomly.

Pair Corralation between Olema Pharmaceuticals and Vaxcyte

Given the investment horizon of 90 days Olema Pharmaceuticals is expected to generate 1.2 times more return on investment than Vaxcyte. However, Olema Pharmaceuticals is 1.2 times more volatile than Vaxcyte. It trades about 0.08 of its potential returns per unit of risk. Vaxcyte is currently generating about 0.08 per unit of risk. If you would invest  460.00  in Olema Pharmaceuticals on May 6, 2025 and sell it today you would earn a total of  81.00  from holding Olema Pharmaceuticals or generate 17.61% return on investment over 90 days.

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

Olema Pharmaceuticals  vs.  Vaxcyte

Olema Pharmaceuticals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Olema Pharmaceuticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Olema Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.

Vaxcyte

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vaxcyte are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Vaxcyte showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Olema Pharmaceuticals and Vaxcyte

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

The idea behind Olema Pharmaceuticals and Vaxcyte 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.