Correlation Between Iovance Biotherapeutics and Novavax
Can any of the company-specific risk be diversified away by investing in both Iovance Biotherapeutics 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 Iovance Biotherapeutics and Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iovance Biotherapeutics and Novavax, you can compare the effects of market volatilities on Iovance Biotherapeutics 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 Iovance Biotherapeutics with a short position of Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iovance Biotherapeutics and Novavax.
Diversification Opportunities for Iovance Biotherapeutics and Novavax
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Iovance and Novavax is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and Iovance Biotherapeutics 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 Iovance Biotherapeutics 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 Iovance Biotherapeutics i.e., Iovance Biotherapeutics and Novavax go up and down completely randomly.
Pair Corralation between Iovance Biotherapeutics and Novavax
Given the investment horizon of 90 days Iovance Biotherapeutics is expected to under-perform the Novavax. In addition to that, Iovance Biotherapeutics is 1.22 times more volatile than Novavax. It trades about -0.18 of its total potential returns per unit of risk. Novavax is currently generating about -0.14 per unit of volatility. If you would invest 974.00 in Novavax on August 26, 2024 and sell it today you would lose (127.00) from holding Novavax or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iovance Biotherapeutics vs. Novavax
Performance |
| Timeline |
| Iovance Biotherapeutics |
| Novavax |
Iovance Biotherapeutics and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iovance Biotherapeutics and Novavax
The main advantage of trading using opposite Iovance Biotherapeutics and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iovance Biotherapeutics 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.| Iovance Biotherapeutics vs. PTC Therapeutics | Iovance Biotherapeutics vs. Krystal Biotech | Iovance Biotherapeutics vs. Sarepta Therapeutics | Iovance Biotherapeutics vs. Madrigal Pharmaceuticals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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