Correlation Between Nuvectis Pharma and ImmuCell

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

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

Diversification Opportunities for Nuvectis Pharma and ImmuCell

-0.22

Correlation Coefficient

Nuvectis Pharma  ImmuCell

Very good diversification

The 3 months correlation between Nuvectis and ImmuCell is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nuvectis Pharma and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell and Nuvectis Pharma 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 Nuvectis Pharma are associated (or correlated) with ImmuCell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuCell has no effect on the direction of Nuvectis Pharma i.e., Nuvectis Pharma and ImmuCell go up and down completely randomly.

Pair Corralation between Nuvectis Pharma and ImmuCell

Given the investment horizon of 90 days Nuvectis Pharma is expected to generate 1.74 times more return on investment than ImmuCell. However, Nuvectis Pharma is 1.74 times more volatile than ImmuCell. It trades about 0.23 of its potential returns per unit of risk. ImmuCell is currently generating about 0.04 per unit of risk. If you would invest  514.00  in Nuvectis Pharma on December 30, 2024 and sell it today you would earn a total of  532.00  from holding Nuvectis Pharma or generate 103.5% return on investment over 90 days.

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

Nuvectis Pharma  vs.  ImmuCell

Nuvectis Pharma

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuvectis Pharma are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, Nuvectis Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

ImmuCell

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, ImmuCell may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nuvectis Pharma and ImmuCell

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

The idea behind Nuvectis Pharma and ImmuCell 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.