Correlation Between Bancolombia and NextCure
Can any of the company-specific risk be diversified away by investing in both Bancolombia 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 Bancolombia and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bancolombia SA ADR and NextCure, you can compare the effects of market volatilities on Bancolombia 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 Bancolombia with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancolombia and NextCure.
Diversification Opportunities for Bancolombia and NextCure
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bancolombia and NextCure is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bancolombia SA ADR and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Bancolombia 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 Bancolombia SA ADR 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 Bancolombia i.e., Bancolombia and NextCure go up and down completely randomly.
Pair Corralation between Bancolombia and NextCure
Considering the 90-day investment horizon Bancolombia SA ADR is expected to generate 0.33 times more return on investment than NextCure. However, Bancolombia SA ADR is 3.0 times less risky than NextCure. It trades about 0.09 of its potential returns per unit of risk. NextCure is currently generating about -0.01 per unit of risk. If you would invest 2,790 in Bancolombia SA ADR on November 9, 2024 and sell it today you would earn a total of 1,206 from holding Bancolombia SA ADR or generate 43.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bancolombia SA ADR vs. NextCure
Performance |
| Timeline |
| Bancolombia SA ADR |
| NextCure |
Bancolombia and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancolombia and NextCure
The main advantage of trading using opposite Bancolombia and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancolombia 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.| Bancolombia vs. Banco De Chile | Bancolombia vs. Banco Bradesco SA | Bancolombia vs. Banco Santander Chile | Bancolombia vs. Intercorp Financial Services |
| 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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