Correlation Between Nkarta and Puma Biotechnology
Can any of the company-specific risk be diversified away by investing in both Nkarta and Puma Biotechnology 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 Puma Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Puma Biotechnology, you can compare the effects of market volatilities on Nkarta and Puma Biotechnology 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 Puma Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Puma Biotechnology.
Diversification Opportunities for Nkarta and Puma Biotechnology
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nkarta and Puma is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Puma Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Biotechnology 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 Puma Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Biotechnology has no effect on the direction of Nkarta i.e., Nkarta and Puma Biotechnology go up and down completely randomly.
Pair Corralation between Nkarta and Puma Biotechnology
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Puma Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Nkarta Inc is 1.14 times less risky than Puma Biotechnology. The stock trades about -0.32 of its potential returns per unit of risk. The Puma Biotechnology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 255.00 in Puma Biotechnology on August 26, 2024 and sell it today you would earn a total of 45.00 from holding Puma Biotechnology or generate 17.65% 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. Puma Biotechnology
Performance |
| Timeline |
| Nkarta Inc |
| Puma Biotechnology |
Nkarta and Puma Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Puma Biotechnology
The main advantage of trading using opposite Nkarta and Puma Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Puma Biotechnology 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 Puma Biotechnology will offset losses from the drop in Puma Biotechnology's long position.| Nkarta vs. Eliem Therapeutics | Nkarta vs. HCW Biologics | Nkarta vs. Scpharmaceuticals | Nkarta vs. Milestone Pharmaceuticals |
| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |