Correlation Between BWV and NextCure
Can any of the company-specific risk be diversified away by investing in both BWV 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 BWV and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BWV and NextCure, you can compare the effects of market volatilities on BWV 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 BWV with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of BWV and NextCure.
Diversification Opportunities for BWV and NextCure
Good diversification
The 3 months correlation between BWV and NextCure is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BWV and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and BWV 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 BWV 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 BWV i.e., BWV and NextCure go up and down completely randomly.
Pair Corralation between BWV and NextCure
Considering the 90-day investment horizon BWV is expected to generate 2.56 times more return on investment than NextCure. However, BWV is 2.56 times more volatile than NextCure. It trades about 0.13 of its potential returns per unit of risk. NextCure is currently generating about 0.0 per unit of risk. If you would invest 80.00 in BWV on August 31, 2024 and sell it today you would earn a total of 32.00 from holding BWV or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.58% |
| Values | Daily Returns |
BWV vs. NextCure
Performance |
| Timeline |
| BWV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NextCure |
BWV and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BWV and NextCure
The main advantage of trading using opposite BWV and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BWV 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.| BWV vs. Virax Biolabs Group | BWV vs. Revelation Biosciences | BWV vs. Kiora Pharmaceuticals | BWV vs. Quoin Pharmaceuticals Ltd |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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