Correlation Between Nuvalent and Exelixis

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

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

Diversification Opportunities for Nuvalent and Exelixis

-0.83

Correlation Coefficient

Nuvalent  Exelixis

Pay attention - limited upside

The 3 months correlation between Nuvalent and Exelixis is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Nuvalent and Exelixis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelixis and Nuvalent 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 Nuvalent are associated (or correlated) with Exelixis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelixis has no effect on the direction of Nuvalent i.e., Nuvalent and Exelixis go up and down completely randomly.

Pair Corralation between Nuvalent and Exelixis

Given the investment horizon of 90 days Nuvalent is expected to under-perform the Exelixis. In addition to that, Nuvalent is 1.08 times more volatile than Exelixis. It trades about -0.03 of its total potential returns per unit of risk. Exelixis is currently generating about 0.07 per unit of volatility. If you would invest  3,370  in Exelixis on December 30, 2024 and sell it today you would earn a total of  300.00  from holding Exelixis or generate 8.9% return on investment over 90 days.

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

Nuvalent  vs.  Exelixis

Nuvalent

Risk-Adjusted Performance

Very Weak

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

Exelixis

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Exelixis are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Exelixis may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nuvalent and Exelixis

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

The idea behind Nuvalent and Exelixis 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.