Correlation Between Inovio Pharmaceuticals and Novavax
Can any of the company-specific risk be diversified away by investing in both Inovio Pharmaceuticals 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 Inovio Pharmaceuticals and Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inovio Pharmaceuticals and Novavax, you can compare the effects of market volatilities on Inovio Pharmaceuticals 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 Inovio Pharmaceuticals with a short position of Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inovio Pharmaceuticals and Novavax.
Diversification Opportunities for Inovio Pharmaceuticals and Novavax
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inovio and Novavax is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Inovio Pharmaceuticals and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and Inovio 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 Inovio Pharmaceuticals 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 Inovio Pharmaceuticals i.e., Inovio Pharmaceuticals and Novavax go up and down completely randomly.
Pair Corralation between Inovio Pharmaceuticals and Novavax
Considering the 90-day investment horizon Inovio Pharmaceuticals is expected to generate 1.12 times more return on investment than Novavax. However, Inovio Pharmaceuticals is 1.12 times more volatile than Novavax. It trades about 0.22 of its potential returns per unit of risk. Novavax is currently generating about 0.0 per unit of risk. If you would invest 179.00 in Inovio Pharmaceuticals on October 24, 2024 and sell it today you would earn a total of 41.00 from holding Inovio Pharmaceuticals or generate 22.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inovio Pharmaceuticals vs. Novavax
Performance |
| Timeline |
| Inovio Pharmaceuticals |
| Novavax |
Inovio Pharmaceuticals and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inovio Pharmaceuticals and Novavax
The main advantage of trading using opposite Inovio Pharmaceuticals and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inovio Pharmaceuticals 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.| Inovio Pharmaceuticals vs. Novavax | Inovio Pharmaceuticals vs. Vaxart Inc | Inovio Pharmaceuticals vs. Enveric Biosciences | Inovio Pharmaceuticals vs. Ocean Biomedical |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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