Correlation Between Novacyt SA and Cytosorbents Crp

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

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

Diversification Opportunities for Novacyt SA and Cytosorbents Crp

0.8

Correlation Coefficient

Novacyt SA  Cytosorbents Crp

Very poor diversification

The 3 months correlation between Novacyt and Cytosorbents is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Novacyt SA and Cytosorbents Crp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytosorbents Crp and Novacyt SA 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 Novacyt SA are associated (or correlated) with Cytosorbents Crp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytosorbents Crp has no effect on the direction of Novacyt SA i.e., Novacyt SA and Cytosorbents Crp go up and down completely randomly.

Pair Corralation between Novacyt SA and Cytosorbents Crp

Assuming the 90 days horizon Novacyt SA is expected to generate 0.74 times more return on investment than Cytosorbents Crp. However, Novacyt SA is 1.35 times less risky than Cytosorbents Crp. It trades about -0.11 of its potential returns per unit of risk. Cytosorbents Crp is currently generating about -0.11 per unit of risk. If you would invest  96.00  in Novacyt SA on September 21, 2024 and sell it today you would lose (32.00) from holding Novacyt SA or give up 33.33% of portfolio value over 90 days.

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

Novacyt SA  vs.  Cytosorbents Crp

Novacyt SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Novacyt SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Cytosorbents Crp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytosorbents Crp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Novacyt SA and Cytosorbents Crp

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

The idea behind Novacyt SA and Cytosorbents Crp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.