Correlation Between Nkarta and HCW Biologics
Can any of the company-specific risk be diversified away by investing in both Nkarta and HCW Biologics 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 HCW Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and HCW Biologics, you can compare the effects of market volatilities on Nkarta and HCW Biologics 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 HCW Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and HCW Biologics.
Diversification Opportunities for Nkarta and HCW Biologics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nkarta and HCW is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and HCW Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCW Biologics 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 HCW Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCW Biologics has no effect on the direction of Nkarta i.e., Nkarta and HCW Biologics go up and down completely randomly.
Pair Corralation between Nkarta and HCW Biologics
Given the investment horizon of 90 days Nkarta Inc is expected to generate 0.99 times more return on investment than HCW Biologics. However, Nkarta Inc is 1.01 times less risky than HCW Biologics. It trades about -0.02 of its potential returns per unit of risk. HCW Biologics is currently generating about -0.19 per unit of risk. If you would invest 250.00 in Nkarta Inc on October 24, 2024 and sell it today you would lose (6.00) from holding Nkarta Inc or give up 2.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 94.74% |
Values | Daily Returns |
Nkarta Inc vs. HCW Biologics
Performance |
Timeline |
Nkarta Inc |
HCW Biologics |
Nkarta and HCW Biologics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nkarta and HCW Biologics
The main advantage of trading using opposite Nkarta and HCW Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, HCW Biologics 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 HCW Biologics will offset losses from the drop in HCW Biologics' long position.Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
HCW Biologics vs. Anebulo Pharmaceuticals | HCW Biologics vs. Rezolute | HCW Biologics vs. Molecular Partners AG | HCW Biologics vs. MediciNova |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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