Correlation Between Nkarta and Anika Therapeutics
Can any of the company-specific risk be diversified away by investing in both Nkarta and Anika Therapeutics 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 Anika Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Anika Therapeutics, you can compare the effects of market volatilities on Nkarta and Anika Therapeutics 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 Anika Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Anika Therapeutics.
Diversification Opportunities for Nkarta and Anika Therapeutics
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nkarta and Anika is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Anika Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anika Therapeutics 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 Anika Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anika Therapeutics has no effect on the direction of Nkarta i.e., Nkarta and Anika Therapeutics go up and down completely randomly.
Pair Corralation between Nkarta and Anika Therapeutics
Given the investment horizon of 90 days Nkarta Inc is expected to generate 0.6 times more return on investment than Anika Therapeutics. However, Nkarta Inc is 1.66 times less risky than Anika Therapeutics. It trades about -0.3 of its potential returns per unit of risk. Anika Therapeutics is currently generating about -0.2 per unit of risk. If you would invest 346.00 in Nkarta Inc on August 28, 2024 and sell it today you would lose (87.00) from holding Nkarta Inc or give up 25.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nkarta Inc vs. Anika Therapeutics
Performance |
| Timeline |
| Nkarta Inc |
| Anika Therapeutics |
Nkarta and Anika Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Anika Therapeutics
The main advantage of trading using opposite Nkarta and Anika Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Anika Therapeutics 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 Anika Therapeutics will offset losses from the drop in Anika Therapeutics' long position.| Nkarta vs. Eliem Therapeutics | Nkarta vs. HCW Biologics | Nkarta vs. Scpharmaceuticals | Nkarta vs. Milestone Pharmaceuticals |
| Anika Therapeutics vs. Eliem Therapeutics | Anika Therapeutics vs. HCW Biologics | Anika Therapeutics vs. Scpharmaceuticals | Anika Therapeutics vs. Milestone Pharmaceuticals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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