Correlation Between Edgewise Therapeutics and NextCure
Can any of the company-specific risk be diversified away by investing in both Edgewise Therapeutics 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 Edgewise Therapeutics and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewise Therapeutics and NextCure, you can compare the effects of market volatilities on Edgewise Therapeutics 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 Edgewise Therapeutics with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewise Therapeutics and NextCure.
Diversification Opportunities for Edgewise Therapeutics and NextCure
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edgewise and NextCure is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Edgewise Therapeutics and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Edgewise Therapeutics 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 Edgewise 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 Edgewise Therapeutics i.e., Edgewise Therapeutics and NextCure go up and down completely randomly.
Pair Corralation between Edgewise Therapeutics and NextCure
Given the investment horizon of 90 days Edgewise Therapeutics is expected to generate 1.24 times more return on investment than NextCure. However, Edgewise Therapeutics is 1.24 times more volatile than NextCure. It trades about 0.09 of its potential returns per unit of risk. NextCure is currently generating about 0.0 per unit of risk. If you would invest 963.00 in Edgewise Therapeutics on September 1, 2024 and sell it today you would earn a total of 2,337 from holding Edgewise Therapeutics or generate 242.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewise Therapeutics vs. NextCure
Performance |
| Timeline |
| Edgewise Therapeutics |
| NextCure |
Edgewise Therapeutics and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewise Therapeutics and NextCure
The main advantage of trading using opposite Edgewise Therapeutics and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewise Therapeutics 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.| Edgewise Therapeutics vs. Cue Biopharma | Edgewise Therapeutics vs. Tff Pharmaceuticals | Edgewise Therapeutics vs. Lantern Pharma | Edgewise Therapeutics vs. Eliem Therapeutics |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |