Correlation Between Cerus and Novacyt SA
Can any of the company-specific risk be diversified away by investing in both Cerus and Novacyt SA 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 Cerus and Novacyt SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerus and Novacyt SA, you can compare the effects of market volatilities on Cerus and Novacyt SA 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 Cerus with a short position of Novacyt SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerus and Novacyt SA.
Diversification Opportunities for Cerus and Novacyt SA
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cerus and Novacyt is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cerus and Novacyt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novacyt SA and Cerus 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 Cerus are associated (or correlated) with Novacyt SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novacyt SA has no effect on the direction of Cerus i.e., Cerus and Novacyt SA go up and down completely randomly.
Pair Corralation between Cerus and Novacyt SA
Given the investment horizon of 90 days Cerus is expected to under-perform the Novacyt SA. But the stock apears to be less risky and, when comparing its historical volatility, Cerus is 1.31 times less risky than Novacyt SA. The stock trades about -0.01 of its potential returns per unit of risk. The Novacyt SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Novacyt SA on September 20, 2024 and sell it today you would lose (11.00) from holding Novacyt SA or give up 14.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Cerus vs. Novacyt SA
Performance |
| Timeline |
| Cerus |
| Novacyt SA |
Cerus and Novacyt SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerus and Novacyt SA
The main advantage of trading using opposite Cerus and Novacyt SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerus position performs unexpectedly, Novacyt SA 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 Novacyt SA will offset losses from the drop in Novacyt SA's long position.The idea behind Cerus and Novacyt SA 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.| Novacyt SA vs. Abbott Laboratories | Novacyt SA vs. Stryker | Novacyt SA vs. Boston Scientific Corp | Novacyt SA vs. Medtronic PLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |