Correlation Between Nkarta and Protara Therapeutics
Can any of the company-specific risk be diversified away by investing in both Nkarta and Protara Therapeutics 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 Protara Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Protara Therapeutics, you can compare the effects of market volatilities on Nkarta and Protara Therapeutics 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 Protara Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Protara Therapeutics.
Diversification Opportunities for Nkarta and Protara Therapeutics
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nkarta and Protara is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Protara Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protara Therapeutics 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 Protara Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protara Therapeutics has no effect on the direction of Nkarta i.e., Nkarta and Protara Therapeutics go up and down completely randomly.
Pair Corralation between Nkarta and Protara Therapeutics
Given the investment horizon of 90 days Nkarta Inc is expected to generate 0.98 times more return on investment than Protara Therapeutics. However, Nkarta Inc is 1.02 times less risky than Protara Therapeutics. It trades about -0.18 of its potential returns per unit of risk. Protara Therapeutics is currently generating about -0.24 per unit of risk. If you would invest 242.00 in Nkarta Inc on November 27, 2024 and sell it today you would lose (37.00) from holding Nkarta Inc or give up 15.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nkarta Inc vs. Protara Therapeutics
Performance |
| Timeline |
| Nkarta Inc |
| Protara Therapeutics |
Nkarta and Protara Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Protara Therapeutics
The main advantage of trading using opposite Nkarta and Protara Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Protara Therapeutics 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 Protara Therapeutics will offset losses from the drop in Protara Therapeutics' long position.| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
| Protara Therapeutics vs. Monopar Therapeutics | Protara Therapeutics vs. Surrozen | Protara Therapeutics vs. Ikena Oncology | Protara Therapeutics vs. Xilio Development |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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