Correlation Between Aeglea Bio and NextCure
Can any of the company-specific risk be diversified away by investing in both Aeglea Bio and NextCure 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 Aeglea Bio and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeglea Bio Therapeutics and NextCure, you can compare the effects of market volatilities on Aeglea Bio and NextCure 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 Aeglea Bio with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeglea Bio and NextCure.
Diversification Opportunities for Aeglea Bio and NextCure
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aeglea and NextCure is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aeglea Bio Therapeutics and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Aeglea 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 Aeglea Bio Therapeutics are associated (or correlated) with NextCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCure has no effect on the direction of Aeglea Bio i.e., Aeglea Bio and NextCure go up and down completely randomly.
Pair Corralation between Aeglea Bio and NextCure
Given the investment horizon of 90 days Aeglea Bio Therapeutics is expected to generate 6.39 times more return on investment than NextCure. However, Aeglea Bio is 6.39 times more volatile than NextCure. It trades about 0.07 of its potential returns per unit of risk. NextCure is currently generating about 0.02 per unit of risk. If you would invest 36.00 in Aeglea Bio Therapeutics on September 13, 2024 and sell it today you would earn a total of 23.00 from holding Aeglea Bio Therapeutics or generate 63.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 29.09% |
| Values | Daily Returns |
Aeglea Bio Therapeutics vs. NextCure
Performance |
| Timeline |
| Aeglea Bio Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NextCure |
Aeglea Bio and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeglea Bio and NextCure
The main advantage of trading using opposite Aeglea Bio and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeglea Bio position performs unexpectedly, NextCure 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 NextCure will offset losses from the drop in NextCure's long position.| Aeglea Bio vs. Edgewise Therapeutics | Aeglea Bio vs. Ikena Oncology | Aeglea Bio vs. Design Therapeutics | Aeglea Bio vs. Xilio Development |
| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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