Correlation Between Nkarta and Opthea
Can any of the company-specific risk be diversified away by investing in both Nkarta and Opthea 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 Opthea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Opthea, you can compare the effects of market volatilities on Nkarta and Opthea 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 Opthea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Opthea.
Diversification Opportunities for Nkarta and Opthea
Very good diversification
The 3 months correlation between Nkarta and Opthea is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Opthea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opthea 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 Opthea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opthea has no effect on the direction of Nkarta i.e., Nkarta and Opthea go up and down completely randomly.
Pair Corralation between Nkarta and Opthea
Given the investment horizon of 90 days Nkarta Inc is expected to generate 1.96 times more return on investment than Opthea. However, Nkarta is 1.96 times more volatile than Opthea. It trades about 0.01 of its potential returns per unit of risk. Opthea is currently generating about 0.0 per unit of risk. If you would invest 815.00 in Nkarta Inc on August 24, 2024 and sell it today you would lose (570.00) from holding Nkarta Inc or give up 69.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
Nkarta Inc vs. Opthea
Performance |
| Timeline |
| Nkarta Inc |
| Opthea |
Nkarta and Opthea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Opthea
The main advantage of trading using opposite Nkarta and Opthea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Opthea 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 Opthea will offset losses from the drop in Opthea's long position.| Nkarta vs. Lyra Therapeutics | Nkarta vs. Hookipa Pharma | Nkarta vs. Cingulate Warrants | Nkarta vs. SAB Biotherapeutics |
| Opthea vs. Molecular Partners AG | Opthea vs. MediciNova | Opthea vs. Anebulo Pharmaceuticals | Opthea vs. Champions Oncology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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