Correlation Between Nuvation Bio and Regencell Bioscience

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

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

Diversification Opportunities for Nuvation Bio and Regencell Bioscience

-0.47

Correlation Coefficient

Nuvation Bio  Regencell Bioscience

Very good diversification

The 3 months correlation between Nuvation and Regencell is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Regencell Bioscience Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regencell Bioscience 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 Regencell Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regencell Bioscience has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Regencell Bioscience go up and down completely randomly.

Pair Corralation between Nuvation Bio and Regencell Bioscience

Given the investment horizon of 90 days Nuvation Bio is expected to under-perform the Regencell Bioscience. But the stock apears to be less risky and, when comparing its historical volatility, Nuvation Bio is 6.67 times less risky than Regencell Bioscience. The stock trades about -0.09 of its potential returns per unit of risk. The Regencell Bioscience Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  482.00  in Regencell Bioscience Holdings on December 30, 2024 and sell it today you would earn a total of  2,085  from holding Regencell Bioscience Holdings or generate 432.57% return on investment over 90 days.

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

Nuvation Bio  vs.  Regencell Bioscience Holdings

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.

Regencell Bioscience

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Regencell Bioscience Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Regencell Bioscience exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuvation Bio and Regencell Bioscience

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

The idea behind Nuvation Bio and Regencell Bioscience Holdings 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..