Correlation Between Trevena and Navidea Biopharmaceutica

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Can any of the company-specific risk be diversified away by investing in both Trevena and Navidea Biopharmaceutica 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 Trevena and Navidea Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trevena and Navidea Biopharmaceuticals, you can compare the effects of market volatilities on Trevena and Navidea Biopharmaceutica 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 Trevena with a short position of Navidea Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trevena and Navidea Biopharmaceutica.

Diversification Opportunities for Trevena and Navidea Biopharmaceutica

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Trevena and Navidea is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Trevena and Navidea Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navidea Biopharmaceutica and Trevena 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 Trevena are associated (or correlated) with Navidea Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navidea Biopharmaceutica has no effect on the direction of Trevena i.e., Trevena and Navidea Biopharmaceutica go up and down completely randomly.

Pair Corralation between Trevena and Navidea Biopharmaceutica

Given the investment horizon of 90 days Trevena is expected to generate 6.66 times more return on investment than Navidea Biopharmaceutica. However, Trevena is 6.66 times more volatile than Navidea Biopharmaceuticals. It trades about 0.15 of its potential returns per unit of risk. Navidea Biopharmaceuticals is currently generating about 0.04 per unit of risk. If you would invest  91.00  in Trevena on July 25, 2025 and sell it today you would lose (89.80) from holding Trevena or give up 98.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Trevena  vs.  Navidea Biopharmaceuticals

 Performance 
       Timeline  
Trevena 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Trevena are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Trevena displayed solid returns over the last few months and may actually be approaching a breakup point.
Navidea Biopharmaceutica 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Navidea Biopharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Navidea Biopharmaceutica sustained solid returns over the last few months and may actually be approaching a breakup point.

Trevena and Navidea Biopharmaceutica Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Trevena and Navidea Biopharmaceutica

The main advantage of trading using opposite Trevena and Navidea Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trevena position performs unexpectedly, Navidea Biopharmaceutica 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 Navidea Biopharmaceutica will offset losses from the drop in Navidea Biopharmaceutica's long position.
The idea behind Trevena and Navidea Biopharmaceuticals 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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