Correlation Between Absci Corp and Novavax

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

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

Diversification Opportunities for Absci Corp and Novavax

0.54

Correlation Coefficient

Absci Corp  Novavax

Very weak diversification

The 3 months correlation between Absci and Novavax is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Absci Corp and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and Absci 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 Absci Corp are associated (or correlated) with Novavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavax has no effect on the direction of Absci Corp i.e., Absci Corp and Novavax go up and down completely randomly.

Pair Corralation between Absci Corp and Novavax

Given the investment horizon of 90 days Absci Corp is expected to generate 0.78 times more return on investment than Novavax. However, Absci Corp is 1.28 times less risky than Novavax. It trades about 0.04 of its potential returns per unit of risk. Novavax is currently generating about 0.03 per unit of risk. If you would invest  300.00  in Absci Corp on September 16, 2024 and sell it today you would earn a total of  70.00  from holding Absci Corp or generate 23.33% return on investment over 90 days.

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

Absci Corp  vs.  Novavax

Absci Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Absci Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Absci Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Novavax

Risk-Adjusted Performance

0 of 100

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Absci Corp and Novavax

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

The idea behind Absci Corp and Novavax 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.