Correlation Between Nkarta and Terns Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Nkarta and Terns Pharmaceuticals 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 Terns Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Terns Pharmaceuticals, you can compare the effects of market volatilities on Nkarta and Terns Pharmaceuticals 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 Terns Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Terns Pharmaceuticals.
Diversification Opportunities for Nkarta and Terns Pharmaceuticals
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nkarta and Terns is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Terns Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terns Pharmaceuticals 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 Terns Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terns Pharmaceuticals has no effect on the direction of Nkarta i.e., Nkarta and Terns Pharmaceuticals go up and down completely randomly.
Pair Corralation between Nkarta and Terns Pharmaceuticals
Given the investment horizon of 90 days Nkarta is expected to generate 2.68 times less return on investment than Terns Pharmaceuticals. In addition to that, Nkarta is 1.58 times more volatile than Terns Pharmaceuticals. It trades about 0.01 of its total potential returns per unit of risk. Terns Pharmaceuticals is currently generating about 0.02 per unit of volatility. If you would invest 609.00 in Terns Pharmaceuticals on August 26, 2024 and sell it today you would lose (30.00) from holding Terns Pharmaceuticals or give up 4.93% 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. Terns Pharmaceuticals
Performance |
| Timeline |
| Nkarta Inc |
| Terns Pharmaceuticals |
Nkarta and Terns Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Terns Pharmaceuticals
The main advantage of trading using opposite Nkarta and Terns Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Terns Pharmaceuticals 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 Terns Pharmaceuticals will offset losses from the drop in Terns Pharmaceuticals' long position.| Nkarta vs. Eliem Therapeutics | Nkarta vs. HCW Biologics | Nkarta vs. Scpharmaceuticals | Nkarta vs. Milestone Pharmaceuticals |
| Terns Pharmaceuticals vs. Capricor Therapeutics | Terns Pharmaceuticals vs. Akari Therapeutics PLC | Terns Pharmaceuticals vs. Soleno Therapeutics | Terns Pharmaceuticals vs. Bio Path Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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