Correlation Between Nkarta and Arcellx
Can any of the company-specific risk be diversified away by investing in both Nkarta and Arcellx 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 Nkarta and Arcellx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Arcellx, you can compare the effects of market volatilities on Nkarta and Arcellx 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 Nkarta with a short position of Arcellx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Arcellx.
Diversification Opportunities for Nkarta and Arcellx
Excellent diversification
The 3 months correlation between Nkarta and Arcellx is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Arcellx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcellx and Nkarta 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 Nkarta Inc are associated (or correlated) with Arcellx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcellx has no effect on the direction of Nkarta i.e., Nkarta and Arcellx go up and down completely randomly.
Pair Corralation between Nkarta and Arcellx
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Arcellx. In addition to that, Nkarta is 1.16 times more volatile than Arcellx. It trades about -0.3 of its total potential returns per unit of risk. Arcellx is currently generating about 0.08 per unit of volatility. If you would invest 8,499 in Arcellx on August 28, 2024 and sell it today you would earn a total of 442.00 from holding Arcellx or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nkarta Inc vs. Arcellx
Performance |
| Timeline |
| Nkarta Inc |
| Arcellx |
Nkarta and Arcellx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Arcellx
The main advantage of trading using opposite Nkarta and Arcellx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Arcellx 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 Arcellx will offset losses from the drop in Arcellx's long position.| Nkarta vs. Eliem Therapeutics | Nkarta vs. HCW Biologics | Nkarta vs. Scpharmaceuticals | Nkarta vs. Milestone Pharmaceuticals |
| Arcellx vs. Nuvalent | Arcellx vs. Ventyx Biosciences | Arcellx vs. Amylyx Pharmaceuticals | Arcellx vs. Day One Biopharmaceuticals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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