Correlation Between Nuvation Bio and Aurora Cannabis
Can any of the company-specific risk be diversified away by investing in both Nuvation Bio and Aurora Cannabis 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 Nuvation Bio and Aurora Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuvation Bio and Aurora Cannabis, you can compare the effects of market volatilities on Nuvation Bio and Aurora Cannabis 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 Nuvation Bio with a short position of Aurora Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvation Bio and Aurora Cannabis.
Diversification Opportunities for Nuvation Bio and Aurora Cannabis
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nuvation and Aurora is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and Nuvation Bio 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 Nuvation Bio are associated (or correlated) with Aurora Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Cannabis has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Aurora Cannabis go up and down completely randomly.
Pair Corralation between Nuvation Bio and Aurora Cannabis
Given the investment horizon of 90 days Nuvation Bio is expected to generate 1.07 times more return on investment than Aurora Cannabis. However, Nuvation Bio is 1.07 times more volatile than Aurora Cannabis. It trades about 0.03 of its potential returns per unit of risk. Aurora Cannabis is currently generating about -0.04 per unit of risk. If you would invest 280.00 in Nuvation Bio on September 3, 2024 and sell it today you would earn a total of 10.00 from holding Nuvation Bio or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuvation Bio vs. Aurora Cannabis
Performance |
| Timeline |
| Nuvation Bio |
| Aurora Cannabis |
Nuvation Bio and Aurora Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuvation Bio and Aurora Cannabis
The main advantage of trading using opposite Nuvation Bio and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvation Bio position performs unexpectedly, Aurora Cannabis 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 Aurora Cannabis will offset losses from the drop in Aurora Cannabis' long position.| Nuvation Bio vs. DiaMedica Therapeutics | Nuvation Bio vs. Lyra Therapeutics | Nuvation Bio vs. Centessa Pharmaceuticals PLC |
| Aurora Cannabis vs. Connect Biopharma Holdings | Aurora Cannabis vs. Acumen Pharmaceuticals | Aurora Cannabis vs. Nuvation Bio | Aurora Cannabis vs. Eledon 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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