Correlation Between Kronos Bio and Nkarta
Can any of the company-specific risk be diversified away by investing in both Kronos Bio 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 Kronos Bio and Nkarta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kronos Bio and Nkarta Inc, you can compare the effects of market volatilities on Kronos Bio 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 Kronos Bio with a short position of Nkarta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kronos Bio and Nkarta.
Diversification Opportunities for Kronos Bio and Nkarta
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kronos and Nkarta is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Bio and Nkarta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nkarta Inc and Kronos Bio 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 Kronos Bio 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 Kronos Bio i.e., Kronos Bio and Nkarta go up and down completely randomly.
Pair Corralation between Kronos Bio and Nkarta
Given the investment horizon of 90 days Kronos Bio is expected to generate 0.92 times more return on investment than Nkarta. However, Kronos Bio is 1.09 times less risky than Nkarta. It trades about 0.02 of its potential returns per unit of risk. Nkarta Inc is currently generating about -0.09 per unit of risk. If you would invest 106.00 in Kronos Bio on November 5, 2024 and sell it today you would lose (8.00) from holding Kronos Bio or give up 7.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kronos Bio vs. Nkarta Inc
Performance |
| Timeline |
| Kronos Bio |
| Nkarta Inc |
Kronos Bio and Nkarta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kronos Bio and Nkarta
The main advantage of trading using opposite Kronos Bio and Nkarta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kronos Bio 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.| Kronos Bio vs. Cyclerion Therapeutics | Kronos Bio vs. Larimar Therapeutics | Kronos Bio vs. Addex Therapeutics | Kronos Bio vs. Achilles Therapeutics PLC |
| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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