Correlation Between Nuvalent and BGC
Can any of the company-specific risk be diversified away by investing in both Nuvalent and BGC 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 Nuvalent and BGC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuvalent and BGC Group, you can compare the effects of market volatilities on Nuvalent and BGC 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 Nuvalent with a short position of BGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvalent and BGC.
Diversification Opportunities for Nuvalent and BGC
Good diversification
The 3 months correlation between Nuvalent and BGC is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nuvalent and BGC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGC Group and Nuvalent 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 Nuvalent are associated (or correlated) with BGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGC Group has no effect on the direction of Nuvalent i.e., Nuvalent and BGC go up and down completely randomly.
Pair Corralation between Nuvalent and BGC
Given the investment horizon of 90 days Nuvalent is expected to generate 2.36 times less return on investment than BGC. But when comparing it to its historical volatility, Nuvalent is 1.67 times less risky than BGC. It trades about 0.12 of its potential returns per unit of risk. BGC Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 914.00 in BGC Group on August 26, 2024 and sell it today you would earn a total of 102.00 from holding BGC Group or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuvalent vs. BGC Group
Performance |
| Timeline |
| Nuvalent |
| BGC Group |
Nuvalent and BGC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuvalent and BGC
The main advantage of trading using opposite Nuvalent and BGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvalent position performs unexpectedly, BGC 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 BGC will offset losses from the drop in BGC's long position.| Nuvalent vs. Arcellx | Nuvalent vs. Vaxcyte | Nuvalent vs. Viridian Therapeutics | Nuvalent vs. Ventyx Biosciences |
| BGC vs. Uber Technologies | BGC vs. Nuvalent | BGC vs. Centessa Pharmaceuticals PLC | BGC vs. Jutal Offshore Oil |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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