Correlation Between Larimar Therapeutics and Novavax
Can any of the company-specific risk be diversified away by investing in both Larimar Therapeutics 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 Larimar Therapeutics and Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Larimar Therapeutics and Novavax, you can compare the effects of market volatilities on Larimar Therapeutics 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 Larimar Therapeutics with a short position of Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Larimar Therapeutics and Novavax.
Diversification Opportunities for Larimar Therapeutics and Novavax
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Larimar and Novavax is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Larimar Therapeutics and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and Larimar Therapeutics 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 Larimar Therapeutics 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 Larimar Therapeutics i.e., Larimar Therapeutics and Novavax go up and down completely randomly.
Pair Corralation between Larimar Therapeutics and Novavax
Given the investment horizon of 90 days Larimar Therapeutics is expected to under-perform the Novavax. In addition to that, Larimar Therapeutics is 1.4 times more volatile than Novavax. It trades about -0.14 of its total potential returns per unit of risk. Novavax is currently generating about -0.08 per unit of volatility. If you would invest 1,025 in Novavax on August 27, 2024 and sell it today you would lose (93.00) from holding Novavax or give up 9.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Larimar Therapeutics vs. Novavax
Performance |
| Timeline |
| Larimar Therapeutics |
| Novavax |
Larimar Therapeutics and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Larimar Therapeutics and Novavax
The main advantage of trading using opposite Larimar Therapeutics and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Larimar Therapeutics 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.| Larimar Therapeutics vs. Vaxcyte | Larimar Therapeutics vs. Syndax Pharmaceuticals | Larimar Therapeutics vs. Merus BV | Larimar Therapeutics vs. Sutro 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |