Correlation Between Novavax and Crispr Therapeutics

Can any of the company-specific risk be diversified away by investing in both Novavax and Crispr Therapeutics 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 Novavax and Crispr Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Novavax and Crispr Therapeutics AG, you can compare the effects of market volatilities on Novavax and Crispr Therapeutics 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 Novavax with a short position of Crispr Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novavax and Crispr Therapeutics.

Diversification Opportunities for Novavax and Crispr Therapeutics

0.7

Correlation Coefficient

Novavax  Crispr Therapeutics

Poor diversification

The 3 months correlation between Novavax and Crispr is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Novavax and Crispr Therapeutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crispr Therapeutics and Novavax 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 Novavax are associated (or correlated) with Crispr Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crispr Therapeutics has no effect on the direction of Novavax i.e., Novavax and Crispr Therapeutics go up and down completely randomly.

Pair Corralation between Novavax and Crispr Therapeutics

Given the investment horizon of 90 days Novavax is expected to under-perform the Crispr Therapeutics. In addition to that, Novavax is 1.34 times more volatile than Crispr Therapeutics AG. It trades about -0.05 of its total potential returns per unit of risk. Crispr Therapeutics AG is currently generating about 0.0 per unit of volatility. If you would invest  4,000  in Crispr Therapeutics AG on February 3, 2025 and sell it today you would lose (175.00) from holding Crispr Therapeutics AG or give up 4.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Novavax  vs.  Crispr Therapeutics AG

Novavax

Risk-Adjusted Performance

Very Weak

Over the last 90 days Novavax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Crispr Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crispr Therapeutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Crispr Therapeutics is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Novavax and Crispr Therapeutics

The main advantage of trading using opposite Novavax and Crispr Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novavax position performs unexpectedly, Crispr Therapeutics 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 Crispr Therapeutics will offset losses from the drop in Crispr Therapeutics' long position.

The idea behind Novavax and Crispr Therapeutics AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.