Correlation Between Nkarta and Vericel Corp
Can any of the company-specific risk be diversified away by investing in both Nkarta and Vericel Corp 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 Vericel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Vericel Corp Ord, you can compare the effects of market volatilities on Nkarta and Vericel Corp 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 Vericel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Vericel Corp.
Diversification Opportunities for Nkarta and Vericel Corp
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nkarta and Vericel is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Vericel Corp Ord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vericel Corp Ord 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 Vericel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vericel Corp Ord has no effect on the direction of Nkarta i.e., Nkarta and Vericel Corp go up and down completely randomly.
Pair Corralation between Nkarta and Vericel Corp
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Vericel Corp. In addition to that, Nkarta is 2.29 times more volatile than Vericel Corp Ord. It trades about -0.06 of its total potential returns per unit of risk. Vericel Corp Ord is currently generating about 0.07 per unit of volatility. If you would invest 3,920 in Vericel Corp Ord on November 9, 2024 and sell it today you would earn a total of 2,050 from holding Vericel Corp Ord or generate 52.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Nkarta Inc vs. Vericel Corp Ord
Performance |
| Timeline |
| Nkarta Inc |
| Vericel Corp Ord |
Nkarta and Vericel Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Vericel Corp
The main advantage of trading using opposite Nkarta and Vericel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Vericel Corp 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 Vericel Corp will offset losses from the drop in Vericel Corp's long position.| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
| Vericel Corp vs. Collplant Biotechnologies | Vericel Corp vs. Keros Therapeutics | Vericel Corp vs. Merus BV | Vericel Corp vs. Century 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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