Correlation Between Protalix Biotherapeutics and Novavax
Can any of the company-specific risk be diversified away by investing in both Protalix Biotherapeutics and Novavax 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 Protalix Biotherapeutics and Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Protalix Biotherapeutics and Novavax, you can compare the effects of market volatilities on Protalix Biotherapeutics and Novavax 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 Protalix Biotherapeutics with a short position of Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protalix Biotherapeutics and Novavax.
Diversification Opportunities for Protalix Biotherapeutics and Novavax
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Protalix and Novavax is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Protalix Biotherapeutics and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and Protalix Biotherapeutics 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 Protalix Biotherapeutics are associated (or correlated) with Novavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavax has no effect on the direction of Protalix Biotherapeutics i.e., Protalix Biotherapeutics and Novavax go up and down completely randomly.
Pair Corralation between Protalix Biotherapeutics and Novavax
Considering the 90-day investment horizon Protalix Biotherapeutics is expected to generate 1.3 times more return on investment than Novavax. However, Protalix Biotherapeutics is 1.3 times more volatile than Novavax. It trades about 0.31 of its potential returns per unit of risk. Novavax is currently generating about -0.11 per unit of risk. If you would invest 117.00 in Protalix Biotherapeutics on August 31, 2024 and sell it today you would earn a total of 52.00 from holding Protalix Biotherapeutics or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Protalix Biotherapeutics vs. Novavax
Performance |
| Timeline |
| Protalix Biotherapeutics |
| Novavax |
Protalix Biotherapeutics and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Protalix Biotherapeutics and Novavax
The main advantage of trading using opposite Protalix Biotherapeutics and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protalix Biotherapeutics position performs unexpectedly, Novavax 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 Novavax will offset losses from the drop in Novavax's long position.| Protalix Biotherapeutics vs. Corvus Pharmaceuticals | Protalix Biotherapeutics vs. Aldeyra | Protalix Biotherapeutics vs. Checkpoint Therapeutics | Protalix Biotherapeutics vs. Cidara 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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