Correlation Between Nuvation Bio and Baudax BioInc
Can any of the company-specific risk be diversified away by investing in both Nuvation Bio and Baudax BioInc 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 Nuvation Bio and Baudax BioInc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuvation Bio and Baudax BioInc, you can compare the effects of market volatilities on Nuvation Bio and Baudax BioInc 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 Nuvation Bio with a short position of Baudax BioInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvation Bio and Baudax BioInc.
Diversification Opportunities for Nuvation Bio and Baudax BioInc
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuvation and Baudax is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Baudax BioInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baudax BioInc and Nuvation Bio 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 Nuvation Bio are associated (or correlated) with Baudax BioInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baudax BioInc has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Baudax BioInc go up and down completely randomly.
Pair Corralation between Nuvation Bio and Baudax BioInc
Given the investment horizon of 90 days Nuvation Bio is expected to generate 0.65 times more return on investment than Baudax BioInc. However, Nuvation Bio is 1.54 times less risky than Baudax BioInc. It trades about 0.15 of its potential returns per unit of risk. Baudax BioInc is currently generating about -0.04 per unit of risk. If you would invest 212.00 in Nuvation Bio on February 2, 2024 and sell it today you would earn a total of 115.00 from holding Nuvation Bio or generate 54.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nuvation Bio vs. Baudax BioInc
Performance |
Timeline |
Nuvation Bio |
Baudax BioInc |
Nuvation Bio and Baudax BioInc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nuvation Bio and Baudax BioInc
The main advantage of trading using opposite Nuvation Bio and Baudax BioInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvation Bio position performs unexpectedly, Baudax BioInc 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 Baudax BioInc will offset losses from the drop in Baudax BioInc's long position.Nuvation Bio vs. Assembly Biosciences | Nuvation Bio vs. Instil Bio | Nuvation Bio vs. Achilles Therapeutics PLC | Nuvation Bio vs. NextCure |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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