Correlation Between Nuvation Bio and Waters

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

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

Diversification Opportunities for Nuvation Bio and Waters

0.01

Correlation Coefficient

Nuvation Bio  Waters

Significant diversification

The 3 months correlation between Nuvation and Waters is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Waters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waters 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 Waters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waters has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Waters go up and down completely randomly.

Pair Corralation between Nuvation Bio and Waters

Given the investment horizon of 90 days Nuvation Bio is expected to under-perform the Waters. In addition to that, Nuvation Bio is 2.8 times more volatile than Waters. It trades about -0.08 of its total potential returns per unit of risk. Waters is currently generating about -0.01 per unit of volatility. If you would invest  36,976  in Waters on December 21, 2024 and sell it today you would lose (654.00) from holding Waters or give up 1.77% of portfolio value over 90 days.

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

Nuvation Bio  vs.  Waters

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.

Waters

Risk-Adjusted Performance

Very Weak

Over the last 90 days Waters has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Waters is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nuvation Bio and Waters

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

The idea behind Nuvation Bio and Waters 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.