Correlation Between HCW Biologics and Nkarta
Can any of the company-specific risk be diversified away by investing in both HCW Biologics and Nkarta 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 HCW Biologics and Nkarta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCW Biologics and Nkarta Inc, you can compare the effects of market volatilities on HCW Biologics and Nkarta 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 HCW Biologics with a short position of Nkarta. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCW Biologics and Nkarta.
Diversification Opportunities for HCW Biologics and Nkarta
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between HCW and Nkarta is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding HCW Biologics and Nkarta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nkarta Inc and HCW Biologics 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 HCW Biologics are associated (or correlated) with Nkarta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nkarta Inc has no effect on the direction of HCW Biologics i.e., HCW Biologics and Nkarta go up and down completely randomly.
Pair Corralation between HCW Biologics and Nkarta
Given the investment horizon of 90 days HCW Biologics is expected to generate 16.24 times more return on investment than Nkarta. However, HCW Biologics is 16.24 times more volatile than Nkarta Inc. It trades about 0.15 of its potential returns per unit of risk. Nkarta Inc is currently generating about -0.4 per unit of risk. If you would invest 50.00 in HCW Biologics on August 25, 2024 and sell it today you would earn a total of 27.00 from holding HCW Biologics or generate 54.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
HCW Biologics vs. Nkarta Inc
Performance |
| Timeline |
| HCW Biologics |
| Nkarta Inc |
HCW Biologics and Nkarta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCW Biologics and Nkarta
The main advantage of trading using opposite HCW Biologics and Nkarta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCW Biologics position performs unexpectedly, Nkarta 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 Nkarta will offset losses from the drop in Nkarta's long position.| HCW Biologics vs. Anebulo Pharmaceuticals | HCW Biologics vs. Rezolute | HCW Biologics vs. Eliem Therapeutics | HCW Biologics vs. Molecular Partners AG |
| Nkarta vs. Eliem Therapeutics | Nkarta vs. HCW Biologics | Nkarta vs. RenovoRx | Nkarta vs. Scpharmaceuticals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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