Correlation Between NovAccess Global and PepGen

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

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

Diversification Opportunities for NovAccess Global and PepGen

0.84

Correlation Coefficient

NovAccess Global  PepGen

Very poor diversification

The 3 months correlation between NovAccess and PepGen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NovAccess Global and PepGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepGen and NovAccess Global 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 NovAccess Global are associated (or correlated) with PepGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepGen has no effect on the direction of NovAccess Global i.e., NovAccess Global and PepGen go up and down completely randomly.

Pair Corralation between NovAccess Global and PepGen

Given the investment horizon of 90 days NovAccess Global is expected to generate 2.02 times more return on investment than PepGen. However, NovAccess Global is 2.02 times more volatile than PepGen. It trades about 0.03 of its potential returns per unit of risk. PepGen is currently generating about -0.03 per unit of risk. If you would invest  0.90  in NovAccess Global on December 4, 2024 and sell it today you would lose (0.86) from holding NovAccess Global or give up 95.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.16%
Values	Daily Returns

NovAccess Global  vs.  PepGen

NovAccess Global

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NovAccess Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, NovAccess Global showed solid returns over the last few months and may actually be approaching a breakup point.

PepGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days PepGen 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 nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with NovAccess Global and PepGen

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

The idea behind NovAccess Global and PepGen 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.

Check out your portfolio center.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.