Correlation Between Novocure and New Horizon
Can any of the company-specific risk be diversified away by investing in both Novocure and New Horizon 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 Novocure and New Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novocure and New Horizon Aircraft, you can compare the effects of market volatilities on Novocure and New Horizon 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 Novocure with a short position of New Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novocure and New Horizon.
Diversification Opportunities for Novocure and New Horizon
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Novocure and New is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Novocure and New Horizon Aircraft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Horizon Aircraft and Novocure 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 Novocure are associated (or correlated) with New Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Horizon Aircraft has no effect on the direction of Novocure i.e., Novocure and New Horizon go up and down completely randomly.
Pair Corralation between Novocure and New Horizon
Given the investment horizon of 90 days Novocure is expected to generate 0.95 times more return on investment than New Horizon. However, Novocure is 1.06 times less risky than New Horizon. It trades about 0.28 of its potential returns per unit of risk. New Horizon Aircraft is currently generating about 0.14 per unit of risk. If you would invest 1,782 in Novocure on September 13, 2024 and sell it today you would earn a total of 1,331 from holding Novocure or generate 74.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Novocure vs. New Horizon Aircraft
Performance |
| Timeline |
| Novocure |
| New Horizon Aircraft |
Novocure and New Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novocure and New Horizon
The main advantage of trading using opposite Novocure and New Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novocure position performs unexpectedly, New Horizon 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 New Horizon will offset losses from the drop in New Horizon's long position.| Novocure vs. Avita Medical | Novocure vs. Sight Sciences | Novocure vs. Treace Medical Concepts | Novocure vs. Neuropace |
| New Horizon vs. Novocure | New Horizon vs. HubSpot | New Horizon vs. DigitalOcean Holdings | New Horizon vs. Appian Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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