Correlation Between Nkarta and Kezar Life
Can any of the company-specific risk be diversified away by investing in both Nkarta and Kezar Life 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 Kezar Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Kezar Life Sciences, you can compare the effects of market volatilities on Nkarta and Kezar Life 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 Kezar Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Kezar Life.
Diversification Opportunities for Nkarta and Kezar Life
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nkarta and Kezar is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Kezar Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kezar Life Sciences 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 Kezar Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kezar Life Sciences has no effect on the direction of Nkarta i.e., Nkarta and Kezar Life go up and down completely randomly.
Pair Corralation between Nkarta and Kezar Life
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Kezar Life. In addition to that, Nkarta is 1.59 times more volatile than Kezar Life Sciences. It trades about -0.08 of its total potential returns per unit of risk. Kezar Life Sciences is currently generating about -0.02 per unit of volatility. If you would invest 657.00 in Kezar Life Sciences on November 3, 2024 and sell it today you would lose (9.00) from holding Kezar Life Sciences or give up 1.37% 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. Kezar Life Sciences
Performance |
| Timeline |
| Nkarta Inc |
| Kezar Life Sciences |
Nkarta and Kezar Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Kezar Life
The main advantage of trading using opposite Nkarta and Kezar Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Kezar Life 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 Kezar Life will offset losses from the drop in Kezar Life's long position.| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
| Kezar Life vs. Century Therapeutics | Kezar Life vs. Mineralys Therapeutics, Common | Kezar Life vs. Nkarta Inc | Kezar Life vs. Surrozen |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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