Correlation Between Coherus BioSciences and NextCure
Can any of the company-specific risk be diversified away by investing in both Coherus 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 Coherus BioSciences and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coherus BioSciences and NextCure, you can compare the effects of market volatilities on Coherus 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 Coherus BioSciences with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coherus BioSciences and NextCure.
Diversification Opportunities for Coherus BioSciences and NextCure
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coherus and NextCure is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Coherus BioSciences and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Coherus 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 Coherus 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 Coherus BioSciences i.e., Coherus BioSciences and NextCure go up and down completely randomly.
Pair Corralation between Coherus BioSciences and NextCure
Given the investment horizon of 90 days Coherus BioSciences is expected to generate 2.07 times more return on investment than NextCure. However, Coherus BioSciences is 2.07 times more volatile than NextCure. It trades about 0.32 of its potential returns per unit of risk. NextCure is currently generating about -0.12 per unit of risk. If you would invest 72.00 in Coherus BioSciences on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Coherus BioSciences or generate 69.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coherus BioSciences vs. NextCure
Performance |
| Timeline |
| Coherus BioSciences |
| NextCure |
Coherus BioSciences and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coherus BioSciences and NextCure
The main advantage of trading using opposite Coherus BioSciences and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coherus 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.| Coherus BioSciences vs. Assembly Biosciences | Coherus BioSciences vs. Spero Therapeutics | Coherus BioSciences vs. Achilles Therapeutics PLC | Coherus BioSciences vs. Instil Bio |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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