Correlation Between Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals 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 Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals, you can compare the effects of market volatilities on Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals 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 Cyclacel Pharmaceuticals with a short position of NovaBay Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals.
Diversification Opportunities for Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cyclacel and NovaBay is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NovaBay Pharmaceuticals and Cyclacel 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 Cyclacel Pharmaceuticals are associated (or correlated) with NovaBay Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NovaBay Pharmaceuticals has no effect on the direction of Cyclacel Pharmaceuticals i.e., Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals go up and down completely randomly.
Pair Corralation between Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals
Given the investment horizon of 90 days Cyclacel Pharmaceuticals is expected to generate 1.09 times more return on investment than NovaBay Pharmaceuticals. However, Cyclacel Pharmaceuticals is 1.09 times more volatile than NovaBay Pharmaceuticals. It trades about -0.06 of its potential returns per unit of risk. NovaBay Pharmaceuticals is currently generating about -0.09 per unit of risk. If you would invest 1,020 in Cyclacel Pharmaceuticals on August 31, 2024 and sell it today you would lose (979.00) from holding Cyclacel Pharmaceuticals or give up 95.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cyclacel Pharmaceuticals vs. NovaBay Pharmaceuticals
Performance |
| Timeline |
| Cyclacel Pharmaceuticals |
| NovaBay Pharmaceuticals |
Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals
The main advantage of trading using opposite Cyclacel Pharmaceuticals and NovaBay Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyclacel Pharmaceuticals position performs unexpectedly, NovaBay Pharmaceuticals 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 NovaBay Pharmaceuticals will offset losses from the drop in NovaBay Pharmaceuticals' long position.| Cyclacel Pharmaceuticals vs. Eliem Therapeutics | Cyclacel Pharmaceuticals vs. Ikena Oncology | Cyclacel Pharmaceuticals vs. Ovid Therapeutics | Cyclacel Pharmaceuticals vs. Connect Biopharma Holdings |
| NovaBay Pharmaceuticals vs. Immix Biopharma | NovaBay Pharmaceuticals vs. Cns Pharmaceuticals | NovaBay Pharmaceuticals vs. Sonnet Biotherapeutics Holdings | NovaBay Pharmaceuticals vs. ZyVersa Therapeutics |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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