Correlation Between RepliCel Life and Nubeva Technologies

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

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

Diversification Opportunities for RepliCel Life and Nubeva Technologies

0.55

Correlation Coefficient

RepliCel Life  Nubeva Technologies

Very weak diversification

The 3 months correlation between RepliCel and Nubeva is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding RepliCel Life Sciences and Nubeva Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nubeva Technologies and RepliCel Life 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 RepliCel Life Sciences are associated (or correlated) with Nubeva Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nubeva Technologies has no effect on the direction of RepliCel Life i.e., RepliCel Life and Nubeva Technologies go up and down completely randomly.

Pair Corralation between RepliCel Life and Nubeva Technologies

Given the investment horizon of 90 days RepliCel Life Sciences is expected to under-perform the Nubeva Technologies. In addition to that, RepliCel Life is 2.34 times more volatile than Nubeva Technologies. It trades about -0.04 of its total potential returns per unit of risk. Nubeva Technologies is currently generating about -0.02 per unit of volatility. If you would invest  28.00  in Nubeva Technologies on September 19, 2024 and sell it today you would lose (8.00) from holding Nubeva Technologies or give up 28.57% of portfolio value over 90 days.

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

RepliCel Life Sciences  vs.  Nubeva Technologies

RepliCel Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RepliCel Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Nubeva Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nubeva Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with RepliCel Life and Nubeva Technologies

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

The idea behind RepliCel Life Sciences and Nubeva 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.