Correlation Between Nextage Therapeutics and Compugen
Can any of the company-specific risk be diversified away by investing in both Nextage Therapeutics and Compugen 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 Nextage Therapeutics and Compugen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextage Therapeutics and Compugen, you can compare the effects of market volatilities on Nextage Therapeutics and Compugen 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 Nextage Therapeutics with a short position of Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextage Therapeutics and Compugen.
Diversification Opportunities for Nextage Therapeutics and Compugen
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nextage and Compugen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nextage Therapeutics and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen and Nextage 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 Nextage Therapeutics are associated (or correlated) with Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Nextage Therapeutics i.e., Nextage Therapeutics and Compugen go up and down completely randomly.
Pair Corralation between Nextage Therapeutics and Compugen
Assuming the 90 days trading horizon Nextage Therapeutics is expected to generate 1.71 times more return on investment than Compugen. However, Nextage Therapeutics is 1.71 times more volatile than Compugen. It trades about 0.06 of its potential returns per unit of risk. Compugen is currently generating about -0.31 per unit of risk. If you would invest 6,780 in Nextage Therapeutics on August 29, 2024 and sell it today you would earn a total of 410.00 from holding Nextage Therapeutics or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextage Therapeutics vs. Compugen
Performance |
| Timeline |
| Nextage Therapeutics |
| Compugen |
Nextage Therapeutics and Compugen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextage Therapeutics and Compugen
The main advantage of trading using opposite Nextage Therapeutics and Compugen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextage Therapeutics position performs unexpectedly, Compugen 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 Compugen will offset losses from the drop in Compugen's long position.| Nextage Therapeutics vs. Kamada | Nextage Therapeutics vs. Bezeq Israeli Telecommunication | Nextage Therapeutics vs. B Communications | Nextage Therapeutics vs. Petrochemical |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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