Correlation Between Nkarta and Theriva Biologics
Can any of the company-specific risk be diversified away by investing in both Nkarta and Theriva Biologics 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 Theriva Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Theriva Biologics, you can compare the effects of market volatilities on Nkarta and Theriva Biologics 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 Theriva Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Theriva Biologics.
Diversification Opportunities for Nkarta and Theriva Biologics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nkarta and Theriva is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Theriva Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theriva Biologics 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 Theriva Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theriva Biologics has no effect on the direction of Nkarta i.e., Nkarta and Theriva Biologics go up and down completely randomly.
Pair Corralation between Nkarta and Theriva Biologics
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Theriva Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Nkarta Inc is 2.02 times less risky than Theriva Biologics. The stock trades about -0.04 of its potential returns per unit of risk. The Theriva Biologics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 146.00 in Theriva Biologics on September 1, 2024 and sell it today you would lose (2.00) from holding Theriva Biologics or give up 1.37% 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. Theriva Biologics
Performance |
| Timeline |
| Nkarta Inc |
| Theriva Biologics |
Nkarta and Theriva Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Theriva Biologics
The main advantage of trading using opposite Nkarta and Theriva Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Theriva Biologics 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 Theriva Biologics will offset losses from the drop in Theriva Biologics' long position.| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
| Theriva Biologics vs. Tff Pharmaceuticals | Theriva Biologics vs. Eliem Therapeutics | Theriva Biologics vs. Inhibrx | Theriva Biologics vs. Enliven Therapeutics |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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