Correlation Between Nuvation Bio and Equillium
Can any of the company-specific risk be diversified away by investing in both Nuvation Bio and Equillium 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 Equillium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuvation Bio and Equillium, you can compare the effects of market volatilities on Nuvation Bio and Equillium 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 Equillium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvation Bio and Equillium.
Diversification Opportunities for Nuvation Bio and Equillium
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuvation and Equillium is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium 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 Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Equillium go up and down completely randomly.
Pair Corralation between Nuvation Bio and Equillium
Given the investment horizon of 90 days Nuvation Bio is expected to under-perform the Equillium. In addition to that, Nuvation Bio is 1.25 times more volatile than Equillium. It trades about -0.03 of its total potential returns per unit of risk. Equillium is currently generating about 0.1 per unit of volatility. If you would invest 60.00 in Equillium on October 22, 2024 and sell it today you would earn a total of 4.00 from holding Equillium or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuvation Bio vs. Equillium
Performance |
| Timeline |
| Nuvation Bio |
| Equillium |
Nuvation Bio and Equillium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuvation Bio and Equillium
The main advantage of trading using opposite Nuvation Bio and Equillium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvation Bio position performs unexpectedly, Equillium 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 Equillium will offset losses from the drop in Equillium's long position.| Nuvation Bio vs. Assembly Biosciences | Nuvation Bio vs. Instil Bio | Nuvation Bio vs. Achilles Therapeutics PLC | Nuvation Bio vs. NextCure |
| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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