Correlation Between Eyenovia and NextCure
Can any of the company-specific risk be diversified away by investing in both Eyenovia 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 Eyenovia and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eyenovia and NextCure, you can compare the effects of market volatilities on Eyenovia 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 Eyenovia with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eyenovia and NextCure.
Diversification Opportunities for Eyenovia and NextCure
Very poor diversification
The 3 months correlation between Eyenovia and NextCure is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eyenovia and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Eyenovia 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 Eyenovia 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 Eyenovia i.e., Eyenovia and NextCure go up and down completely randomly.
Pair Corralation between Eyenovia and NextCure
Given the investment horizon of 90 days Eyenovia is expected to under-perform the NextCure. In addition to that, Eyenovia is 7.3 times more volatile than NextCure. It trades about -0.18 of its total potential returns per unit of risk. NextCure is currently generating about -0.37 per unit of volatility. If you would invest 134.00 in NextCure on September 15, 2024 and sell it today you would lose (26.00) from holding NextCure or give up 19.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eyenovia vs. NextCure
Performance |
| Timeline |
| Eyenovia |
| NextCure |
Eyenovia and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eyenovia and NextCure
The main advantage of trading using opposite Eyenovia and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eyenovia 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.| Eyenovia vs. Emergent Biosolutions | Eyenovia vs. Bausch Health Companies | Eyenovia vs. Neurocrine Biosciences | Eyenovia vs. Teva Pharma Industries |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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