Correlation Between Superior Plus and Novavax
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Novavax, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Novavax.
Diversification Opportunities for Superior Plus and Novavax
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and Novavax is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Novavax go up and down completely randomly.
Pair Corralation between Superior Plus and Novavax
Assuming the 90 days horizon Superior Plus Corp is expected to generate 0.6 times more return on investment than Novavax. However, Superior Plus Corp is 1.66 times less risky than Novavax. It trades about -0.05 of its potential returns per unit of risk. Novavax is currently generating about -0.03 per unit of risk. If you would invest 470.00 in Superior Plus Corp on August 29, 2024 and sell it today you would lose (60.00) from holding Superior Plus Corp or give up 12.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
Superior Plus Corp vs. Novavax
Performance |
| Timeline |
| Superior Plus Corp |
| Novavax |
Superior Plus and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Novavax
The main advantage of trading using opposite Superior Plus and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. Meli Hotels International | Superior Plus vs. InterContinental Hotels Group | Superior Plus vs. PT Bank Maybank | Superior Plus vs. Pebblebrook Hotel Trust |
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 Stocks Directory module to find actively traded stocks across global markets.
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