Correlation Between Cars and Novavax
Can any of the company-specific risk be diversified away by investing in both Cars and Novavax 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 Cars and Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Novavax, you can compare the effects of market volatilities on Cars and Novavax 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 Cars with a short position of Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Novavax.
Diversification Opportunities for Cars and Novavax
Significant diversification
The 3 months correlation between Cars and Novavax is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and Cars 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 Cars Inc are associated (or correlated) with Novavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavax has no effect on the direction of Cars i.e., Cars and Novavax go up and down completely randomly.
Pair Corralation between Cars and Novavax
Assuming the 90 days trading horizon Cars is expected to generate 118.45 times less return on investment than Novavax. But when comparing it to its historical volatility, Cars Inc is 8.49 times less risky than Novavax. It trades about 0.01 of its potential returns per unit of risk. Novavax is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 768.00 in Novavax on September 14, 2024 and sell it today you would earn a total of 422.00 from holding Novavax or generate 54.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 56.99% |
| Values | Daily Returns |
Cars Inc vs. Novavax
Performance |
| Timeline |
| Cars Inc |
| Novavax |
Cars and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Novavax
The main advantage of trading using opposite Cars and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars position performs unexpectedly, Novavax 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 Novavax will offset losses from the drop in Novavax's long position.| Cars vs. Southern Copper Corp | Cars vs. Nordic Semiconductor ASA | Cars vs. Elmos Semiconductor SE | Cars vs. Samsung Electronics Co |
| Novavax vs. GlobalData PLC | Novavax vs. Cars Inc | Novavax vs. Fidelity National Information | Novavax vs. Public Storage |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |