Correlation Between Vascular Biogenics and Novartis
Can any of the company-specific risk be diversified away by investing in both Vascular Biogenics 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 Vascular Biogenics and Novartis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vascular Biogenics and Novartis AG ADR, you can compare the effects of market volatilities on Vascular Biogenics 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 Vascular Biogenics with a short position of Novartis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vascular Biogenics and Novartis.
Diversification Opportunities for Vascular Biogenics and Novartis
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vascular and Novartis is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vascular Biogenics 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 Vascular Biogenics 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 Vascular Biogenics 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 Vascular Biogenics i.e., Vascular Biogenics and Novartis go up and down completely randomly.
Pair Corralation between Vascular Biogenics and Novartis
Given the investment horizon of 90 days Vascular Biogenics is expected to under-perform the Novartis. In addition to that, Vascular Biogenics is 6.42 times more volatile than Novartis AG ADR. It trades about -0.03 of its total potential returns per unit of risk. Novartis AG ADR is currently generating about 0.04 per unit of volatility. If you would invest 7,691 in Novartis AG ADR on January 24, 2024 and sell it today you would earn a total of 1,821 from holding Novartis AG ADR or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 74.09% |
| Values | Daily Returns |
Vascular Biogenics vs. Novartis AG ADR
Performance |
| Timeline |
| Vascular Biogenics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Novartis AG ADR |
Vascular Biogenics and Novartis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vascular Biogenics and Novartis
The main advantage of trading using opposite Vascular Biogenics and Novartis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vascular Biogenics 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.| Vascular Biogenics vs. Revelation Biosciences | Vascular Biogenics vs. Zura Bio Limited | Vascular Biogenics vs. Phio Pharmaceuticals Corp | Vascular Biogenics vs. ZyVersa Therapeutics |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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