Correlation Between NovaBay Pharmaceuticals and Compugen
Can any of the company-specific risk be diversified away by investing in both NovaBay Pharmaceuticals and Compugen 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 NovaBay Pharmaceuticals and Compugen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaBay Pharmaceuticals and Compugen, you can compare the effects of market volatilities on NovaBay Pharmaceuticals and Compugen 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 NovaBay Pharmaceuticals with a short position of Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaBay Pharmaceuticals and Compugen.
Diversification Opportunities for NovaBay Pharmaceuticals and Compugen
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NovaBay and Compugen is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding NovaBay Pharmaceuticals and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen and NovaBay 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 NovaBay Pharmaceuticals are associated (or correlated) with Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of NovaBay Pharmaceuticals i.e., NovaBay Pharmaceuticals and Compugen go up and down completely randomly.
Pair Corralation between NovaBay Pharmaceuticals and Compugen
Considering the 90-day investment horizon NovaBay Pharmaceuticals is expected to under-perform the Compugen. But the stock apears to be less risky and, when comparing its historical volatility, NovaBay Pharmaceuticals is 1.37 times less risky than Compugen. The stock trades about -0.08 of its potential returns per unit of risk. The Compugen is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Compugen on September 1, 2024 and sell it today you would earn a total of 89.00 from holding Compugen or generate 123.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NovaBay Pharmaceuticals vs. Compugen
Performance |
| Timeline |
| NovaBay Pharmaceuticals |
| Compugen |
NovaBay Pharmaceuticals and Compugen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaBay Pharmaceuticals and Compugen
The main advantage of trading using opposite NovaBay Pharmaceuticals and Compugen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaBay Pharmaceuticals position performs unexpectedly, Compugen 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 Compugen will offset losses from the drop in Compugen's long position.| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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