Correlation Between INmune Bio and Novavax
Can any of the company-specific risk be diversified away by investing in both INmune Bio 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 INmune Bio and Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INmune Bio and Novavax, you can compare the effects of market volatilities on INmune Bio 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 INmune Bio with a short position of Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of INmune Bio and Novavax.
Diversification Opportunities for INmune Bio and Novavax
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between INmune and Novavax is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding INmune Bio and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and INmune Bio 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 INmune Bio 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 INmune Bio i.e., INmune Bio and Novavax go up and down completely randomly.
Pair Corralation between INmune Bio and Novavax
Given the investment horizon of 90 days INmune Bio is expected to under-perform the Novavax. But the stock apears to be less risky and, when comparing its historical volatility, INmune Bio is 1.28 times less risky than Novavax. The stock trades about -0.3 of its potential returns per unit of risk. The Novavax is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 1,007 in Novavax on August 30, 2024 and sell it today you would lose (145.00) from holding Novavax or give up 14.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INmune Bio vs. Novavax
Performance |
| Timeline |
| INmune Bio |
| Novavax |
INmune Bio and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INmune Bio and Novavax
The main advantage of trading using opposite INmune Bio and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INmune Bio 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.| INmune Bio vs. Tff Pharmaceuticals | INmune Bio vs. Anebulo Pharmaceuticals | INmune Bio vs. AN2 Therapeutics | INmune Bio vs. Cue Biopharma |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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