Correlation Between Nuvation Bio and Assembly Biosciences

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

By analyzing existing cross correlation between Nuvation Bio and Assembly Biosciences, you can compare the effects of market volatilities on Nuvation Bio and Assembly Biosciences 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 Assembly Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvation Bio and Assembly Biosciences.

Diversification Opportunities for Nuvation Bio and Assembly Biosciences

0.85

Correlation Coefficient

Nuvation Bio  Assembly Biosciences

Very poor diversification

The 3 months correlation between Nuvation and Assembly is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Assembly Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assembly Biosciences 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 Assembly Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assembly Biosciences has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Assembly Biosciences go up and down completely randomly.

Pair Corralation between Nuvation Bio and Assembly Biosciences

Given the investment horizon of 90 days Nuvation Bio is expected to under-perform the Assembly Biosciences. But the stock apears to be less risky and, when comparing its historical volatility, Nuvation Bio is 1.04 times less risky than Assembly Biosciences. The stock trades about -0.15 of its potential returns per unit of risk. The Assembly Biosciences is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  1,675  in Assembly Biosciences on December 1, 2024 and sell it today you would lose (387.00) from holding Assembly Biosciences or give up 23.1% of portfolio value over 90 days.

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

Nuvation Bio  vs.  Assembly Biosciences

Nuvation Bio

Risk-Adjusted Performance

Very Weak

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

Assembly Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assembly Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Nuvation Bio and Assembly Biosciences

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

The idea behind Nuvation Bio and Assembly Biosciences 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.