Correlation Between NovaBay Pharmaceuticals and Home Federal
Can any of the company-specific risk be diversified away by investing in both NovaBay Pharmaceuticals and Home Federal 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 NovaBay Pharmaceuticals and Home Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaBay Pharmaceuticals and Home Federal Bancorp, you can compare the effects of market volatilities on NovaBay Pharmaceuticals and Home Federal 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 NovaBay Pharmaceuticals with a short position of Home Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaBay Pharmaceuticals and Home Federal.
Diversification Opportunities for NovaBay Pharmaceuticals and Home Federal
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NovaBay and Home is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding NovaBay Pharmaceuticals and Home Federal Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Federal Bancorp and NovaBay Pharmaceuticals 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 NovaBay Pharmaceuticals are associated (or correlated) with Home Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Federal Bancorp has no effect on the direction of NovaBay Pharmaceuticals i.e., NovaBay Pharmaceuticals and Home Federal go up and down completely randomly.
Pair Corralation between NovaBay Pharmaceuticals and Home Federal
Considering the 90-day investment horizon NovaBay Pharmaceuticals is expected to under-perform the Home Federal. In addition to that, NovaBay Pharmaceuticals is 2.35 times more volatile than Home Federal Bancorp. It trades about -0.18 of its total potential returns per unit of risk. Home Federal Bancorp is currently generating about -0.07 per unit of volatility. If you would invest 1,261 in Home Federal Bancorp on February 2, 2024 and sell it today you would lose (101.00) from holding Home Federal Bancorp or give up 8.01% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 93.02% |
Values | Daily Returns |
NovaBay Pharmaceuticals vs. Home Federal Bancorp
Performance |
Timeline |
NovaBay Pharmaceuticals |
Home Federal Bancorp |
NovaBay Pharmaceuticals and Home Federal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NovaBay Pharmaceuticals and Home Federal
The main advantage of trading using opposite NovaBay Pharmaceuticals and Home Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaBay Pharmaceuticals position performs unexpectedly, Home Federal 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 Home Federal will offset losses from the drop in Home Federal's long position.NovaBay Pharmaceuticals vs. Invesco Trust For | NovaBay Pharmaceuticals vs. LSI Industries | NovaBay Pharmaceuticals vs. American Funds 2025 | NovaBay Pharmaceuticals vs. Merck Company |
Home Federal vs. HMN Financial | Home Federal vs. Community West Bancshares | Home Federal vs. Cullman Bancorp | Home Federal vs. Lake Shore Bancorp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |