Correlation Between Nkarta and Xencor
Can any of the company-specific risk be diversified away by investing in both Nkarta and Xencor 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 Xencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Xencor Inc, you can compare the effects of market volatilities on Nkarta and Xencor 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 Xencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Xencor.
Diversification Opportunities for Nkarta and Xencor
Pay attention - limited upside
The 3 months correlation between Nkarta and Xencor is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc 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 Xencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xencor Inc has no effect on the direction of Nkarta i.e., Nkarta and Xencor go up and down completely randomly.
Pair Corralation between Nkarta and Xencor
Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Xencor. In addition to that, Nkarta is 2.01 times more volatile than Xencor Inc. It trades about -0.29 of its total potential returns per unit of risk. Xencor Inc is currently generating about 0.36 per unit of volatility. If you would invest 2,157 in Xencor Inc on August 28, 2024 and sell it today you would earn a total of 373.00 from holding Xencor Inc or generate 17.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nkarta Inc vs. Xencor Inc
Performance |
| Timeline |
| Nkarta Inc |
| Xencor Inc |
Nkarta and Xencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nkarta and Xencor
The main advantage of trading using opposite Nkarta and Xencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Xencor 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 Xencor will offset losses from the drop in Xencor's long position.| Nkarta vs. Eliem Therapeutics | Nkarta vs. Scpharmaceuticals | Nkarta vs. Milestone Pharmaceuticals | Nkarta vs. Seres Therapeutics |
| Xencor vs. Edgewise Therapeutics | Xencor vs. Keros Therapeutics | Xencor vs. Monte Rosa Therapeutics | Xencor vs. Mineralys Therapeutics, Common |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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