Correlation Between NovaBay Pharmaceuticals and VTv Therapeutics
Can any of the company-specific risk be diversified away by investing in both NovaBay Pharmaceuticals and VTv Therapeutics 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 VTv Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaBay Pharmaceuticals and vTv Therapeutics, you can compare the effects of market volatilities on NovaBay Pharmaceuticals and VTv Therapeutics 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 VTv Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaBay Pharmaceuticals and VTv Therapeutics.
Diversification Opportunities for NovaBay Pharmaceuticals and VTv Therapeutics
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NovaBay and VTv is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding NovaBay Pharmaceuticals and vTv Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on vTv Therapeutics 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 VTv Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of vTv Therapeutics has no effect on the direction of NovaBay Pharmaceuticals i.e., NovaBay Pharmaceuticals and VTv Therapeutics go up and down completely randomly.
Pair Corralation between NovaBay Pharmaceuticals and VTv Therapeutics
Considering the 90-day investment horizon NovaBay Pharmaceuticals is expected to generate 1.31 times less return on investment than VTv Therapeutics. In addition to that, NovaBay Pharmaceuticals is 1.85 times more volatile than vTv Therapeutics. It trades about 0.06 of its total potential returns per unit of risk. vTv Therapeutics is currently generating about 0.13 per unit of volatility. If you would invest 1,357 in vTv Therapeutics on November 2, 2024 and sell it today you would earn a total of 109.00 from holding vTv Therapeutics or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NovaBay Pharmaceuticals vs. vTv Therapeutics
Performance |
| Timeline |
| NovaBay Pharmaceuticals |
| vTv Therapeutics |
NovaBay Pharmaceuticals and VTv Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaBay Pharmaceuticals and VTv Therapeutics
The main advantage of trading using opposite NovaBay Pharmaceuticals and VTv Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaBay Pharmaceuticals position performs unexpectedly, VTv Therapeutics 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 VTv Therapeutics will offset losses from the drop in VTv Therapeutics' long position.| NovaBay Pharmaceuticals vs. Immix Biopharma | NovaBay Pharmaceuticals vs. Cns Pharmaceuticals | NovaBay Pharmaceuticals vs. Sonnet Biotherapeutics Holdings | NovaBay Pharmaceuticals vs. ZyVersa Therapeutics |
| VTv Therapeutics vs. Zura Bio Limited | VTv Therapeutics vs. Phio Pharmaceuticals Corp | VTv Therapeutics vs. Immix Biopharma | VTv Therapeutics vs. NovaBay 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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