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

0.45

Correlation Coefficient

Novavax  Ocugen

Very weak diversification

The 3 months correlation between Novavax and Ocugen is 0.45. 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 generate 2.95 times less return on investment than Ocugen. In addition to that, Novavax is 1.35 times more volatile than Ocugen Inc. It trades about 0.01 of its total potential returns per unit of risk. Ocugen Inc is currently generating about 0.02 per unit of volatility. If you would invest  222.00  in Ocugen Inc on February 24, 2024 and sell it today you would lose (44.00) from holding Ocugen Inc or give up 19.82% 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

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Novavax are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Novavax showed solid returns over the last few months and may actually be approaching a breakup point.

Ocugen Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ocugen Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Ocugen displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.