Correlation Between Vericel Corp and Novartis
Can any of the company-specific risk be diversified away by investing in both Vericel Corp and Novartis 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 Vericel Corp and Novartis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vericel Corp Ord and Novartis AG ADR, you can compare the effects of market volatilities on Vericel Corp and Novartis 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 Vericel Corp with a short position of Novartis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vericel Corp and Novartis.
Diversification Opportunities for Vericel Corp and Novartis
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vericel and Novartis is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Novartis AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novartis AG ADR and Vericel Corp 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 Vericel Corp Ord are associated (or correlated) with Novartis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novartis AG ADR has no effect on the direction of Vericel Corp i.e., Vericel Corp and Novartis go up and down completely randomly.
Pair Corralation between Vericel Corp and Novartis
Given the investment horizon of 90 days Vericel Corp Ord is expected to generate 1.62 times more return on investment than Novartis. However, Vericel Corp is 1.62 times more volatile than Novartis AG ADR. It trades about 0.07 of its potential returns per unit of risk. Novartis AG ADR is currently generating about 0.04 per unit of risk. If you would invest 5,289 in Vericel Corp Ord on November 18, 2024 and sell it today you would earn a total of 420.00 from holding Vericel Corp Ord or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vericel Corp Ord vs. Novartis AG ADR
Performance |
| Timeline |
| Vericel Corp Ord |
| Novartis AG ADR |
Vericel Corp and Novartis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vericel Corp and Novartis
The main advantage of trading using opposite Vericel Corp and Novartis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vericel Corp position performs unexpectedly, Novartis 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 Novartis will offset losses from the drop in Novartis' long position.| Vericel Corp vs. Collplant Biotechnologies | Vericel Corp vs. Keros Therapeutics | Vericel Corp vs. Merus BV | Vericel Corp vs. Century Therapeutics |
| Novartis vs. AstraZeneca PLC ADR | Novartis vs. GlaxoSmithKline PLC ADR | Novartis vs. Roche Holding Ltd | Novartis vs. Bristol Myers Squibb |
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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Commodity Directory Find actively traded commodities issued by global exchanges |