Correlation Between TG Therapeutics and Novavax
Can any of the company-specific risk be diversified away by investing in both TG Therapeutics 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 TG Therapeutics and Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TG Therapeutics and Novavax, you can compare the effects of market volatilities on TG Therapeutics 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 TG Therapeutics with a short position of Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of TG Therapeutics and Novavax.
Diversification Opportunities for TG Therapeutics and Novavax
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TGTX and Novavax is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding TG Therapeutics and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and TG Therapeutics 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 TG Therapeutics 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 TG Therapeutics i.e., TG Therapeutics and Novavax go up and down completely randomly.
Pair Corralation between TG Therapeutics and Novavax
Given the investment horizon of 90 days TG Therapeutics is expected to generate 1.21 times more return on investment than Novavax. However, TG Therapeutics is 1.21 times more volatile than Novavax. It trades about 0.27 of its potential returns per unit of risk. Novavax is currently generating about -0.13 per unit of risk. If you would invest 2,571 in TG Therapeutics on August 30, 2024 and sell it today you would earn a total of 929.00 from holding TG Therapeutics or generate 36.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
TG Therapeutics vs. Novavax
Performance |
| Timeline |
| TG Therapeutics |
| Novavax |
TG Therapeutics and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TG Therapeutics and Novavax
The main advantage of trading using opposite TG Therapeutics and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TG Therapeutics 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.| TG Therapeutics vs. Madrigal Pharmaceuticals | TG Therapeutics vs. Terns Pharmaceuticals | TG Therapeutics vs. Hepion Pharmaceuticals | TG Therapeutics vs. Exelixis |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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