Correlation Between Nkarta and Lifecore Biomedical

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Can any of the company-specific risk be diversified away by investing in both Nkarta and Lifecore Biomedical 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 Lifecore Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Lifecore Biomedical, you can compare the effects of market volatilities on Nkarta and Lifecore Biomedical 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 Lifecore Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Lifecore Biomedical.

Diversification Opportunities for Nkarta and Lifecore Biomedical

NkartaLifecoreDiversified AwayNkartaLifecoreDiversified Away100%
0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Nkarta and Lifecore is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Lifecore Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifecore Biomedical 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 Lifecore Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifecore Biomedical has no effect on the direction of Nkarta i.e., Nkarta and Lifecore Biomedical go up and down completely randomly.

Pair Corralation between Nkarta and Lifecore Biomedical

Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Lifecore Biomedical. In addition to that, Nkarta is 1.87 times more volatile than Lifecore Biomedical. It trades about -0.25 of its total potential returns per unit of risk. Lifecore Biomedical is currently generating about -0.06 per unit of volatility. If you would invest  595.00  in Lifecore Biomedical on November 27, 2024 and sell it today you would lose (19.00) from holding Lifecore Biomedical or give up 3.19% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Nkarta Inc  vs.  Lifecore Biomedical

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15NKTX LFCR
       Timeline  
Nkarta Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Nkarta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb22.22.42.62.833.2
Lifecore Biomedical 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Lifecore Biomedical has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5.566.577.5

Nkarta and Lifecore Biomedical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.43-5.56-3.7-1.83-0.03111.683.425.156.898.63 0.01800.01850.01900.0195
JavaScript chart by amCharts 3.21.15NKTX LFCR
       Returns  

Pair Trading with Nkarta and Lifecore Biomedical

The main advantage of trading using opposite Nkarta and Lifecore Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Lifecore Biomedical 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 Lifecore Biomedical will offset losses from the drop in Lifecore Biomedical's long position.
The idea behind Nkarta Inc and Lifecore Biomedical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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