Correlation Between Nkarta and Evolus
Can any of the company-specific risk be diversified away by investing in both Nkarta and Evolus 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 Evolus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Evolus Inc, you can compare the effects of market volatilities on Nkarta and Evolus 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 Evolus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Evolus.
Diversification Opportunities for Nkarta and Evolus
Poor diversification
The 3 months correlation between Nkarta and Evolus is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Evolus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolus 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 Evolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolus Inc has no effect on the direction of Nkarta i.e., Nkarta and Evolus go up and down completely randomly.
Pair Corralation between Nkarta and Evolus
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Evolus. In addition to that, Nkarta is 1.59 times more volatile than Evolus Inc. It trades about -0.06 of its total potential returns per unit of risk. Evolus Inc is currently generating about 0.04 per unit of volatility. If you would invest 1,043 in Evolus Inc on November 9, 2024 and sell it today you would earn a total of 298.00 from holding Evolus Inc or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Nkarta Inc vs. Evolus Inc
Performance |
| Timeline |
| Nkarta Inc |
| Evolus Inc |
Nkarta and Evolus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Evolus
The main advantage of trading using opposite Nkarta and Evolus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Evolus 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 Evolus will offset losses from the drop in Evolus' long position.| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
| Evolus vs. Collegium Pharmaceutical | Evolus vs. Phibro Animal Health | Evolus vs. ANI Pharmaceuticals | Evolus vs. Procaps Group SA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |