Correlation Between NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals, you can compare the effects of market volatilities on NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals.
Diversification Opportunities for NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NovaBay and Cyclacel is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclacel Pharmaceuticals has no effect on the direction of NovaBay Pharmaceuticals i.e., NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals go up and down completely randomly.
Pair Corralation between NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals
Considering the 90-day investment horizon NovaBay Pharmaceuticals is expected to under-perform the Cyclacel Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, NovaBay Pharmaceuticals is 1.09 times less risky than Cyclacel Pharmaceuticals. The stock trades about -0.09 of its potential returns per unit of risk. The Cyclacel Pharmaceuticals is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,020 in Cyclacel Pharmaceuticals on August 31, 2024 and sell it today you would lose (979.00) from holding Cyclacel Pharmaceuticals or give up 95.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NovaBay Pharmaceuticals vs. Cyclacel Pharmaceuticals
Performance |
| Timeline |
| NovaBay Pharmaceuticals |
| Cyclacel Pharmaceuticals |
NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals
The main advantage of trading using opposite NovaBay Pharmaceuticals and Cyclacel Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaBay Pharmaceuticals position performs unexpectedly, Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals will offset losses from the drop in Cyclacel Pharmaceuticals' long position.| NovaBay Pharmaceuticals vs. Immix Biopharma | NovaBay Pharmaceuticals vs. Cns Pharmaceuticals | NovaBay Pharmaceuticals vs. Sonnet Biotherapeutics Holdings | NovaBay Pharmaceuticals vs. ZyVersa Therapeutics |
| Cyclacel Pharmaceuticals vs. Eliem Therapeutics | Cyclacel Pharmaceuticals vs. Ikena Oncology | Cyclacel Pharmaceuticals vs. Ovid Therapeutics | Cyclacel Pharmaceuticals vs. Connect Biopharma Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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