Correlation Between Nuvation Bio and GRPH Old

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

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

Diversification Opportunities for Nuvation Bio and GRPH Old

-0.54

Correlation Coefficient

Nuvation Bio  GRPH Old

Excellent diversification

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

Pair Corralation between Nuvation Bio and GRPH Old

If you would invest  201.00  in Nuvation Bio on October 10, 2024 and sell it today you would earn a total of  124.00  from holding Nuvation Bio or generate 61.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.64%
Values	Daily Returns

Nuvation Bio  vs.  GRPH Old

Nuvation Bio

Risk-Adjusted Performance

14 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuvation Bio are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nuvation Bio sustained solid returns over the last few months and may actually be approaching a breakup point.

GRPH Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRPH Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, GRPH Old is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Nuvation Bio and GRPH Old

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

The idea behind Nuvation Bio and GRPH Old 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.