Correlation Between Novacyt SA and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both Novacyt SA and Abbott Laboratories 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 Novacyt SA and Abbott Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novacyt SA and Abbott Laboratories, you can compare the effects of market volatilities on Novacyt SA and Abbott Laboratories 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 Novacyt SA with a short position of Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novacyt SA and Abbott Laboratories.
Diversification Opportunities for Novacyt SA and Abbott Laboratories
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Novacyt and Abbott is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Novacyt SA and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories and Novacyt SA 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 Novacyt SA are associated (or correlated) with Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of Novacyt SA i.e., Novacyt SA and Abbott Laboratories go up and down completely randomly.
Pair Corralation between Novacyt SA and Abbott Laboratories
Assuming the 90 days horizon Novacyt SA is expected to generate 5.59 times more return on investment than Abbott Laboratories. However, Novacyt SA is 5.59 times more volatile than Abbott Laboratories. It trades about 0.02 of its potential returns per unit of risk. Abbott Laboratories is currently generating about 0.02 per unit of risk. If you would invest 75.00 in Novacyt SA on September 20, 2024 and sell it today you would lose (11.00) from holding Novacyt SA or give up 14.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novacyt SA vs. Abbott Laboratories
Performance |
| Timeline |
| Novacyt SA |
| Abbott Laboratories |
Novacyt SA and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novacyt SA and Abbott Laboratories
The main advantage of trading using opposite Novacyt SA and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novacyt SA position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| Novacyt SA vs. Abbott Laboratories | Novacyt SA vs. Stryker | Novacyt SA vs. Boston Scientific Corp | Novacyt SA vs. Medtronic PLC |
| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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