Correlation Between Novavax and Vaxart

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Can any of the company-specific risk be diversified away by investing in both Novavax and Vaxart 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 Vaxart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novavax and Vaxart Inc, you can compare the effects of market volatilities on Novavax and Vaxart 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 Vaxart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novavax and Vaxart.

Diversification Opportunities for Novavax and Vaxart

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Novavax and Vaxart is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Novavax and Vaxart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxart Inc 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 Vaxart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaxart Inc has no effect on the direction of Novavax i.e., Novavax and Vaxart go up and down completely randomly.

Pair Corralation between Novavax and Vaxart

Given the investment horizon of 90 days Novavax is expected to generate 0.86 times more return on investment than Vaxart. However, Novavax is 1.16 times less risky than Vaxart. It trades about 0.07 of its potential returns per unit of risk. Vaxart Inc is currently generating about 0.03 per unit of risk. If you would invest  857.00  in Novavax on November 2, 2024 and sell it today you would earn a total of  44.00  from holding Novavax or generate 5.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Novavax  vs.  Vaxart Inc

 Performance 
       Timeline  
Novavax 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Novavax are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Novavax is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Vaxart Inc 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Vaxart Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Vaxart may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Novavax and Vaxart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Novavax and Vaxart

The main advantage of trading using opposite Novavax and Vaxart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novavax position performs unexpectedly, Vaxart 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 Vaxart will offset losses from the drop in Vaxart's long position.
The idea behind Novavax and Vaxart Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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