Correlation Between Nuvation Bio and Fresh Tracks

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

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

Diversification Opportunities for Nuvation Bio and Fresh Tracks

-0.07

Correlation Coefficient

Nuvation Bio  Fresh Tracks

Good diversification

The 3 months correlation between Nuvation and Fresh is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Fresh Tracks Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Tracks Therapeutics and Nuvation Bio 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 Nuvation Bio are associated (or correlated) with Fresh Tracks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Tracks Therapeutics has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Fresh Tracks go up and down completely randomly.

Pair Corralation between Nuvation Bio and Fresh Tracks

If you would invest  288.00  in Nuvation Bio on April 13, 2024 and sell it today you would earn a total of  46.00  from holding Nuvation Bio or generate 15.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Nuvation Bio  vs.  Fresh Tracks Therapeutics

Nuvation Bio

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuvation Bio are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nuvation Bio sustained solid returns over the last few months and may actually be approaching a breakup point.

Fresh Tracks Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nuvation Bio and Fresh Tracks

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

The idea behind Nuvation Bio and Fresh Tracks Therapeutics 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.