Correlation Between Novavax and Intellia Therapeutics
Can any of the company-specific risk be diversified away by investing in both Novavax and Intellia 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 Novavax and Intellia Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novavax and Intellia Therapeutics, you can compare the effects of market volatilities on Novavax and Intellia 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 Novavax with a short position of Intellia Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novavax and Intellia Therapeutics.
Diversification Opportunities for Novavax and Intellia Therapeutics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Novavax and Intellia is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Novavax and Intellia Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellia Therapeutics and Novavax 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 Novavax are associated (or correlated) with Intellia Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellia Therapeutics has no effect on the direction of Novavax i.e., Novavax and Intellia Therapeutics go up and down completely randomly.
Pair Corralation between Novavax and Intellia Therapeutics
Given the investment horizon of 90 days Novavax is expected to generate 0.63 times more return on investment than Intellia Therapeutics. However, Novavax is 1.58 times less risky than Intellia Therapeutics. It trades about -0.24 of its potential returns per unit of risk. Intellia Therapeutics is currently generating about -0.24 per unit of risk. If you would invest 1,000.00 in Novavax on August 24, 2024 and sell it today you would lose (196.00) from holding Novavax or give up 19.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novavax vs. Intellia Therapeutics
Performance |
| Timeline |
| Novavax |
| Intellia Therapeutics |
Novavax and Intellia Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novavax and Intellia Therapeutics
The main advantage of trading using opposite Novavax and Intellia Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novavax position performs unexpectedly, Intellia 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 Intellia Therapeutics will offset losses from the drop in Intellia Therapeutics' long position.| Novavax vs. ZyVersa Therapeutics | Novavax vs. Sonnet Biotherapeutics Holdings | Novavax vs. Zura Bio Limited | Novavax vs. Phio Pharmaceuticals Corp |
| Intellia Therapeutics vs. Editas Medicine | Intellia Therapeutics vs. Caribou Biosciences | Intellia Therapeutics vs. Crispr Therapeutics AG | Intellia Therapeutics vs. Verve Therapeutics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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