Correlation Between Pacira BioSciences, and Dynavax Technologies

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

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

Diversification Opportunities for Pacira BioSciences, and Dynavax Technologies

0.45

Correlation Coefficient

Pacira BioSciences,  Dynavax Technologies

Very weak diversification

The 3 months correlation between Pacira and Dynavax is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pacira BioSciences, and Dynavax Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynavax Technologies and Pacira BioSciences, 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 Pacira BioSciences, are associated (or correlated) with Dynavax Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynavax Technologies has no effect on the direction of Pacira BioSciences, i.e., Pacira BioSciences, and Dynavax Technologies go up and down completely randomly.

Pair Corralation between Pacira BioSciences, and Dynavax Technologies

Given the investment horizon of 90 days Pacira BioSciences, is expected to generate 1.73 times less return on investment than Dynavax Technologies. But when comparing it to its historical volatility, Pacira BioSciences, is 1.02 times less risky than Dynavax Technologies. It trades about 0.07 of its potential returns per unit of risk. Dynavax Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,088  in Dynavax Technologies on August 31, 2024 and sell it today you would earn a total of  203.00  from holding Dynavax Technologies or generate 18.66% return on investment over 90 days.

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

Pacira BioSciences,  vs.  Dynavax Technologies

Pacira BioSciences,

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pacira BioSciences, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Pacira BioSciences, may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Dynavax Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dynavax Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Dynavax Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pacira BioSciences, and Dynavax Technologies

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

The idea behind Pacira BioSciences, and Dynavax Technologies 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.