Correlation Between Nkarta and MediciNova
Can any of the company-specific risk be diversified away by investing in both Nkarta and MediciNova 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 MediciNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and MediciNova, you can compare the effects of market volatilities on Nkarta and MediciNova 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 MediciNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and MediciNova.
Diversification Opportunities for Nkarta and MediciNova
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nkarta and MediciNova is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and MediciNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediciNova 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 MediciNova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediciNova has no effect on the direction of Nkarta i.e., Nkarta and MediciNova go up and down completely randomly.
Pair Corralation between Nkarta and MediciNova
Given the investment horizon of 90 days Nkarta Inc is expected to generate 2.1 times more return on investment than MediciNova. However, Nkarta is 2.1 times more volatile than MediciNova. It trades about 0.05 of its potential returns per unit of risk. MediciNova is currently generating about 0.02 per unit of risk. If you would invest 182.00 in Nkarta Inc on September 12, 2024 and sell it today you would earn a total of 73.50 from holding Nkarta Inc or generate 40.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nkarta Inc vs. MediciNova
Performance |
| Timeline |
| Nkarta Inc |
| MediciNova |
Nkarta and MediciNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and MediciNova
The main advantage of trading using opposite Nkarta and MediciNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, MediciNova 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 MediciNova will offset losses from the drop in MediciNova's long position.| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
| MediciNova vs. Aerovate Therapeutics | MediciNova vs. Adagene | MediciNova vs. Acrivon Therapeutics, Common | MediciNova vs. Rezolute |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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