Correlation Between Nkarta and TC BioPharm
Can any of the company-specific risk be diversified away by investing in both Nkarta and TC BioPharm 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 TC BioPharm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and TC BioPharm Holdings, you can compare the effects of market volatilities on Nkarta and TC BioPharm 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 TC BioPharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and TC BioPharm.
Diversification Opportunities for Nkarta and TC BioPharm
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nkarta and TCBP is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and TC BioPharm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC BioPharm Holdings 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 TC BioPharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC BioPharm Holdings has no effect on the direction of Nkarta i.e., Nkarta and TC BioPharm go up and down completely randomly.
Pair Corralation between Nkarta and TC BioPharm
Given the investment horizon of 90 days Nkarta Inc is expected to generate 0.52 times more return on investment than TC BioPharm. However, Nkarta Inc is 1.92 times less risky than TC BioPharm. It trades about -0.06 of its potential returns per unit of risk. TC BioPharm Holdings is currently generating about -0.05 per unit of risk. If you would invest 912.00 in Nkarta Inc on September 1, 2024 and sell it today you would lose (625.00) from holding Nkarta Inc or give up 68.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nkarta Inc vs. TC BioPharm Holdings
Performance |
| Timeline |
| Nkarta Inc |
| TC BioPharm Holdings |
Nkarta and TC BioPharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and TC BioPharm
The main advantage of trading using opposite Nkarta and TC BioPharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, TC BioPharm 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 TC BioPharm will offset losses from the drop in TC BioPharm's long position.| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
| TC BioPharm vs. ZyVersa Therapeutics | TC BioPharm vs. Palisade Bio | TC BioPharm vs. Unicycive Therapeutics | TC BioPharm vs. Immix Biopharma |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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