Correlation Between Novocure and Establishment Labs
Can any of the company-specific risk be diversified away by investing in both Novocure and Establishment Labs 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 Novocure and Establishment Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novocure and Establishment Labs Holdings, you can compare the effects of market volatilities on Novocure and Establishment Labs 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 Novocure with a short position of Establishment Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novocure and Establishment Labs.
Diversification Opportunities for Novocure and Establishment Labs
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Novocure and Establishment is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Novocure and Establishment Labs Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Establishment Labs and Novocure 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 Novocure are associated (or correlated) with Establishment Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Establishment Labs has no effect on the direction of Novocure i.e., Novocure and Establishment Labs go up and down completely randomly.
Pair Corralation between Novocure and Establishment Labs
Given the investment horizon of 90 days Novocure is expected to generate 73.56 times less return on investment than Establishment Labs. But when comparing it to its historical volatility, Novocure is 1.48 times less risky than Establishment Labs. It trades about 0.0 of its potential returns per unit of risk. Establishment Labs Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,795 in Establishment Labs Holdings on August 14, 2025 and sell it today you would earn a total of 2,608 from holding Establishment Labs Holdings or generate 68.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novocure vs. Establishment Labs Holdings
Performance |
| Timeline |
| Novocure |
| Establishment Labs |
Novocure and Establishment Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novocure and Establishment Labs
The main advantage of trading using opposite Novocure and Establishment Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novocure position performs unexpectedly, Establishment Labs 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 Establishment Labs will offset losses from the drop in Establishment Labs' long position.| Novocure vs. Azenta Inc | Novocure vs. Kestra Medical Technologies, | Novocure vs. STAAR Surgical | Novocure vs. BioLife Solutions |
| Establishment Labs vs. CONMED | Establishment Labs vs. Azenta Inc | Establishment Labs vs. UFP Technologies | Establishment Labs vs. Novocure |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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