Correlation Between Navidea Biopharmaceutica and Statera Biopharma

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

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

Diversification Opportunities for Navidea Biopharmaceutica and Statera Biopharma

-0.3

Correlation Coefficient

Navidea Biopharmaceutica  Statera Biopharma

Very good diversification

The 3 months correlation between Navidea and Statera is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Navidea Biopharmaceuticals and Statera Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Statera Biopharma and Navidea Biopharmaceutica 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 Navidea Biopharmaceuticals are associated (or correlated) with Statera Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Statera Biopharma has no effect on the direction of Navidea Biopharmaceutica i.e., Navidea Biopharmaceutica and Statera Biopharma go up and down completely randomly.

Pair Corralation between Navidea Biopharmaceutica and Statera Biopharma

Given the investment horizon of 90 days Navidea Biopharmaceuticals is expected to under-perform the Statera Biopharma. But the pink sheet apears to be less risky and, when comparing its historical volatility, Navidea Biopharmaceuticals is 1.85 times less risky than Statera Biopharma. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Statera Biopharma is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Statera Biopharma on October 7, 2024 and sell it today you would lose (0.39) from holding Statera Biopharma or give up 9.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	12.98%
Values	Daily Returns

Navidea Biopharmaceuticals  vs.  Statera Biopharma

Navidea Biopharmaceutica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Navidea Biopharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Navidea Biopharmaceutica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Statera Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Statera Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Statera Biopharma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Navidea Biopharmaceutica and Statera Biopharma

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

The idea behind Navidea Biopharmaceuticals and Statera Biopharma 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.