Correlation Between Nkarta and NewAmsterdam Pharma
Can any of the company-specific risk be diversified away by investing in both Nkarta and NewAmsterdam Pharma 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 NewAmsterdam Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and NewAmsterdam Pharma, you can compare the effects of market volatilities on Nkarta and NewAmsterdam Pharma 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 NewAmsterdam Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and NewAmsterdam Pharma.
Diversification Opportunities for Nkarta and NewAmsterdam Pharma
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nkarta and NewAmsterdam is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and NewAmsterdam Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewAmsterdam Pharma 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 NewAmsterdam Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewAmsterdam Pharma has no effect on the direction of Nkarta i.e., Nkarta and NewAmsterdam Pharma go up and down completely randomly.
Pair Corralation between Nkarta and NewAmsterdam Pharma
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the NewAmsterdam Pharma. In addition to that, Nkarta is 1.09 times more volatile than NewAmsterdam Pharma. It trades about -0.26 of its total potential returns per unit of risk. NewAmsterdam Pharma is currently generating about 0.16 per unit of volatility. If you would invest 1,623 in NewAmsterdam Pharma on August 28, 2024 and sell it today you would earn a total of 461.00 from holding NewAmsterdam Pharma or generate 28.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nkarta Inc vs. NewAmsterdam Pharma
Performance |
| Timeline |
| Nkarta Inc |
| NewAmsterdam Pharma |
Nkarta and NewAmsterdam Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and NewAmsterdam Pharma
The main advantage of trading using opposite Nkarta and NewAmsterdam Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, NewAmsterdam Pharma 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 NewAmsterdam Pharma will offset losses from the drop in NewAmsterdam Pharma's long position.| Nkarta vs. Eliem Therapeutics | Nkarta vs. Scpharmaceuticals | Nkarta vs. Milestone Pharmaceuticals | Nkarta vs. Seres Therapeutics |
| NewAmsterdam Pharma vs. Eliem Therapeutics | NewAmsterdam Pharma vs. Scpharmaceuticals | NewAmsterdam Pharma vs. Milestone Pharmaceuticals | NewAmsterdam Pharma vs. Seres Therapeutics |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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