Correlation Between Aptose Biosciences and NextCure
Can any of the company-specific risk be diversified away by investing in both Aptose Biosciences 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 Aptose Biosciences and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptose Biosciences and NextCure, you can compare the effects of market volatilities on Aptose Biosciences 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 Aptose Biosciences with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptose Biosciences and NextCure.
Diversification Opportunities for Aptose Biosciences and NextCure
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aptose and NextCure is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Aptose Biosciences 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 Aptose Biosciences 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 Aptose Biosciences i.e., Aptose Biosciences and NextCure go up and down completely randomly.
Pair Corralation between Aptose Biosciences and NextCure
Given the investment horizon of 90 days Aptose Biosciences is expected to under-perform the NextCure. In addition to that, Aptose Biosciences is 1.26 times more volatile than NextCure. It trades about -0.12 of its total potential returns per unit of risk. NextCure is currently generating about -0.01 per unit of volatility. If you would invest 115.00 in NextCure on November 9, 2024 and sell it today you would lose (36.00) from holding NextCure or give up 31.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptose Biosciences vs. NextCure
Performance |
| Timeline |
| Aptose Biosciences |
| NextCure |
Aptose Biosciences and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptose Biosciences and NextCure
The main advantage of trading using opposite Aptose Biosciences and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptose Biosciences 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.| Aptose Biosciences vs. CytomX Therapeutics | Aptose Biosciences vs. Instil Bio | Aptose Biosciences vs. Spero Therapeutics | Aptose Biosciences vs. Assembly Biosciences |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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