Correlation Between Novavax and Ocugen

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

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

Diversification Opportunities for Novavax and Ocugen

0.57

Correlation Coefficient

Novavax  Ocugen

Very weak diversification

The 3 months correlation between Novavax and Ocugen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Novavax and Ocugen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocugen Inc and Novavax 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 Novavax are associated (or correlated) with Ocugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocugen Inc has no effect on the direction of Novavax i.e., Novavax and Ocugen go up and down completely randomly.

Pair Corralation between Novavax and Ocugen

Given the investment horizon of 90 days Novavax is expected to under-perform the Ocugen. But the stock apears to be less risky and, when comparing its historical volatility, Novavax is 1.04 times less risky than Ocugen. The stock trades about -0.02 of its potential returns per unit of risk. The Ocugen Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  81.00  in Ocugen Inc on December 30, 2024 and sell it today you would lose (1.00) from holding Ocugen Inc or give up 1.23% of portfolio value over 90 days.

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

Novavax  vs.  Ocugen Inc

Novavax

Risk-Adjusted Performance

Very Weak

Over the last 90 days Novavax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Novavax is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ocugen Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ocugen Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Ocugen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Novavax and Ocugen

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

The idea behind Novavax and Ocugen Inc 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.