Correlation Between Century Therapeutics and NextCure
Can any of the company-specific risk be diversified away by investing in both Century 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 Century Therapeutics and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and NextCure, you can compare the effects of market volatilities on Century 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 Century Therapeutics with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and NextCure.
Diversification Opportunities for Century Therapeutics and NextCure
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and NextCure is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Century 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 Century 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 Century Therapeutics i.e., Century Therapeutics and NextCure go up and down completely randomly.
Pair Corralation between Century Therapeutics and NextCure
Given the investment horizon of 90 days Century Therapeutics is expected to under-perform the NextCure. In addition to that, Century Therapeutics is 1.06 times more volatile than NextCure. It trades about -0.16 of its total potential returns per unit of risk. NextCure is currently generating about -0.11 per unit of volatility. If you would invest 135.00 in NextCure on August 25, 2024 and sell it today you would lose (16.00) from holding NextCure or give up 11.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Century Therapeutics vs. NextCure
Performance |
| Timeline |
| Century Therapeutics |
| NextCure |
Century Therapeutics and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and NextCure
The main advantage of trading using opposite Century Therapeutics and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century 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.| Century Therapeutics vs. Ikena Oncology | Century Therapeutics vs. Eliem Therapeutics | Century Therapeutics vs. HCW Biologics | Century Therapeutics vs. RenovoRx |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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