Correlation Between Nkarta and Biofrontera
Can any of the company-specific risk be diversified away by investing in both Nkarta and Biofrontera 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 Biofrontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Biofrontera, you can compare the effects of market volatilities on Nkarta and Biofrontera 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 Biofrontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Biofrontera.
Diversification Opportunities for Nkarta and Biofrontera
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nkarta and Biofrontera is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera 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 Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of Nkarta i.e., Nkarta and Biofrontera go up and down completely randomly.
Pair Corralation between Nkarta and Biofrontera
Given the investment horizon of 90 days Nkarta Inc is expected to generate 1.13 times more return on investment than Biofrontera. However, Nkarta is 1.13 times more volatile than Biofrontera. It trades about 0.02 of its potential returns per unit of risk. Biofrontera is currently generating about -0.03 per unit of risk. If you would invest 472.00 in Nkarta Inc on August 31, 2024 and sell it today you would lose (185.00) from holding Nkarta Inc or give up 39.19% 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. Biofrontera
Performance |
| Timeline |
| Nkarta Inc |
| Biofrontera |
Nkarta and Biofrontera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Biofrontera
The main advantage of trading using opposite Nkarta and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Biofrontera 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 Biofrontera will offset losses from the drop in Biofrontera's long position.| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
| Biofrontera vs. Shuttle Pharmaceuticals | Biofrontera vs. Akanda Corp | Biofrontera vs. China Pharma Holdings | Biofrontera vs. Sunshine Biopharma Warrant |
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 CEOs Directory module to screen CEOs from public companies around the world.
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