Correlation Between Nuvation Bio and Chimerix
Can any of the company-specific risk be diversified away by investing in both Nuvation Bio and Chimerix 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 Chimerix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuvation Bio and Chimerix, you can compare the effects of market volatilities on Nuvation Bio and Chimerix 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 Chimerix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvation Bio and Chimerix.
Diversification Opportunities for Nuvation Bio and Chimerix
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nuvation and Chimerix is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Chimerix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimerix 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 Chimerix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimerix has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Chimerix go up and down completely randomly.
Pair Corralation between Nuvation Bio and Chimerix
Given the investment horizon of 90 days Nuvation Bio is expected to generate 1.25 times more return on investment than Chimerix. However, Nuvation Bio is 1.25 times more volatile than Chimerix. It trades about 0.01 of its potential returns per unit of risk. Chimerix is currently generating about -0.01 per unit of risk. If you would invest 318.00 in Nuvation Bio on September 3, 2024 and sell it today you would lose (28.00) from holding Nuvation Bio or give up 8.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuvation Bio vs. Chimerix
Performance |
| Timeline |
| Nuvation Bio |
| Chimerix |
Nuvation Bio and Chimerix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuvation Bio and Chimerix
The main advantage of trading using opposite Nuvation Bio and Chimerix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvation Bio position performs unexpectedly, Chimerix 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 Chimerix will offset losses from the drop in Chimerix's long position.| Nuvation Bio vs. DiaMedica Therapeutics | Nuvation Bio vs. Lyra Therapeutics | Nuvation Bio vs. Centessa Pharmaceuticals PLC |
| Chimerix vs. Assembly Biosciences | Chimerix vs. Spero Therapeutics | Chimerix vs. Achilles Therapeutics PLC | Chimerix vs. Instil Bio |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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