Correlation Between Nkarta and Applied Therapeutics
Can any of the company-specific risk be diversified away by investing in both Nkarta and Applied 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 Applied 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 Applied Therapeutics, you can compare the effects of market volatilities on Nkarta and Applied 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 Applied Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Applied Therapeutics.
Diversification Opportunities for Nkarta and Applied Therapeutics
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nkarta and Applied is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Applied Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied 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 Applied Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Therapeutics has no effect on the direction of Nkarta i.e., Nkarta and Applied Therapeutics go up and down completely randomly.
Pair Corralation between Nkarta and Applied Therapeutics
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Applied Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Nkarta Inc is 1.38 times less risky than Applied Therapeutics. The stock trades about -0.18 of its potential returns per unit of risk. The Applied Therapeutics is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Applied Therapeutics on November 27, 2024 and sell it today you would lose (5.00) from holding Applied Therapeutics or give up 8.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nkarta Inc vs. Applied Therapeutics
Performance |
| Timeline |
| Nkarta Inc |
| Applied Therapeutics |
Nkarta and Applied Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Applied Therapeutics
The main advantage of trading using opposite Nkarta and Applied Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Applied 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 Applied Therapeutics will offset losses from the drop in Applied Therapeutics' long position.| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
| Applied Therapeutics vs. X4 Pharmaceuticals | Applied Therapeutics vs. Terns Pharmaceuticals | Applied Therapeutics vs. Day One Biopharmaceuticals | Applied Therapeutics vs. Hookipa Pharma |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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