Correlation Between Sensei Biotherapeutics and Nuvation Bio
Can any of the company-specific risk be diversified away by investing in both Sensei Biotherapeutics and Nuvation Bio 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 Sensei Biotherapeutics and Nuvation Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensei Biotherapeutics and Nuvation Bio, you can compare the effects of market volatilities on Sensei Biotherapeutics and Nuvation Bio 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 Sensei Biotherapeutics with a short position of Nuvation Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensei Biotherapeutics and Nuvation Bio.
Diversification Opportunities for Sensei Biotherapeutics and Nuvation Bio
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sensei and Nuvation is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sensei Biotherapeutics and Nuvation Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvation Bio and Sensei 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 Sensei Biotherapeutics are associated (or correlated) with Nuvation Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvation Bio has no effect on the direction of Sensei Biotherapeutics i.e., Sensei Biotherapeutics and Nuvation Bio go up and down completely randomly.
Pair Corralation between Sensei Biotherapeutics and Nuvation Bio
Given the investment horizon of 90 days Sensei Biotherapeutics is expected to generate 3.66 times less return on investment than Nuvation Bio. In addition to that, Sensei Biotherapeutics is 1.56 times more volatile than Nuvation Bio. It trades about 0.0 of its total potential returns per unit of risk. Nuvation Bio is currently generating about 0.03 per unit of volatility. If you would invest 240.00 in Nuvation Bio on October 25, 2024 and sell it today you would earn a total of 36.00 from holding Nuvation Bio or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensei Biotherapeutics vs. Nuvation Bio
Performance |
| Timeline |
| Sensei Biotherapeutics |
| Nuvation Bio |
Sensei Biotherapeutics and Nuvation Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensei Biotherapeutics and Nuvation Bio
The main advantage of trading using opposite Sensei Biotherapeutics and Nuvation Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensei Biotherapeutics position performs unexpectedly, Nuvation Bio 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 Nuvation Bio will offset losses from the drop in Nuvation Bio's long position.The idea behind Sensei Biotherapeutics and Nuvation Bio 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.| Nuvation Bio vs. Assembly Biosciences | Nuvation Bio vs. Instil Bio | Nuvation Bio vs. Achilles Therapeutics PLC | Nuvation Bio vs. NextCure |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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