Correlation Between Nkarta and Cybin
Can any of the company-specific risk be diversified away by investing in both Nkarta and Cybin 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 Cybin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Cybin Inc, you can compare the effects of market volatilities on Nkarta and Cybin 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 Cybin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Cybin.
Diversification Opportunities for Nkarta and Cybin
Excellent diversification
The 3 months correlation between Nkarta and Cybin is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Cybin Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cybin Inc 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 Cybin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cybin Inc has no effect on the direction of Nkarta i.e., Nkarta and Cybin go up and down completely randomly.
Pair Corralation between Nkarta and Cybin
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Cybin. But the stock apears to be less risky and, when comparing its historical volatility, Nkarta Inc is 1.52 times less risky than Cybin. The stock trades about -0.3 of its potential returns per unit of risk. The Cybin Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,067 in Cybin Inc on August 28, 2024 and sell it today you would lose (3.00) from holding Cybin Inc or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nkarta Inc vs. Cybin Inc
Performance |
| Timeline |
| Nkarta Inc |
| Cybin Inc |
Nkarta and Cybin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Cybin
The main advantage of trading using opposite Nkarta and Cybin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Cybin 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 Cybin will offset losses from the drop in Cybin's long position.| Nkarta vs. Eliem Therapeutics | Nkarta vs. HCW Biologics | Nkarta vs. Scpharmaceuticals | Nkarta vs. Milestone Pharmaceuticals |
| Cybin vs. Mind Medicine | Cybin vs. Seelos Therapeutics | Cybin vs. GH Research PLC | Cybin vs. Awakn Life Sciences |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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