Correlation Between Gracell Biotechnologies and NextCure
Can any of the company-specific risk be diversified away by investing in both Gracell Biotechnologies 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 Gracell Biotechnologies and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gracell Biotechnologies and NextCure, you can compare the effects of market volatilities on Gracell Biotechnologies 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 Gracell Biotechnologies with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gracell Biotechnologies and NextCure.
Diversification Opportunities for Gracell Biotechnologies and NextCure
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gracell and NextCure is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Gracell Biotechnologies and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Gracell Biotechnologies 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 Gracell Biotechnologies 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 Gracell Biotechnologies i.e., Gracell Biotechnologies and NextCure go up and down completely randomly.
Pair Corralation between Gracell Biotechnologies and NextCure
Given the investment horizon of 90 days Gracell Biotechnologies is expected to generate 2.28 times more return on investment than NextCure. However, Gracell Biotechnologies is 2.28 times more volatile than NextCure. It trades about 0.05 of its potential returns per unit of risk. NextCure is currently generating about 0.0 per unit of risk. If you would invest 393.00 in Gracell Biotechnologies on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Gracell Biotechnologies or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.58% |
| Values | Daily Returns |
Gracell Biotechnologies vs. NextCure
Performance |
| Timeline |
| Gracell Biotechnologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NextCure |
Gracell Biotechnologies and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gracell Biotechnologies and NextCure
The main advantage of trading using opposite Gracell Biotechnologies and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gracell Biotechnologies 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.| Gracell Biotechnologies vs. Monte Rosa Therapeutics | Gracell Biotechnologies vs. Design Therapeutics | Gracell Biotechnologies vs. Erasca Inc | Gracell Biotechnologies vs. NextCure |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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