Correlation Between Nuvalent and Ikena Oncology
Can any of the company-specific risk be diversified away by investing in both Nuvalent and Ikena Oncology 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 Nuvalent and Ikena Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuvalent and Ikena Oncology, you can compare the effects of market volatilities on Nuvalent and Ikena Oncology 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 Nuvalent with a short position of Ikena Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvalent and Ikena Oncology.
Diversification Opportunities for Nuvalent and Ikena Oncology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nuvalent and Ikena is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nuvalent and Ikena Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikena Oncology and Nuvalent 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 Nuvalent are associated (or correlated) with Ikena Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikena Oncology has no effect on the direction of Nuvalent i.e., Nuvalent and Ikena Oncology go up and down completely randomly.
Pair Corralation between Nuvalent and Ikena Oncology
Given the investment horizon of 90 days Nuvalent is expected to generate 0.63 times more return on investment than Ikena Oncology. However, Nuvalent is 1.59 times less risky than Ikena Oncology. It trades about 0.08 of its potential returns per unit of risk. Ikena Oncology is currently generating about -0.03 per unit of risk. If you would invest 4,350 in Nuvalent on September 2, 2024 and sell it today you would earn a total of 5,318 from holding Nuvalent or generate 122.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuvalent vs. Ikena Oncology
Performance |
| Timeline |
| Nuvalent |
| Ikena Oncology |
Nuvalent and Ikena Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuvalent and Ikena Oncology
The main advantage of trading using opposite Nuvalent and Ikena Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvalent position performs unexpectedly, Ikena Oncology 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 Ikena Oncology will offset losses from the drop in Ikena Oncology's long position.| Nuvalent vs. Arcellx | Nuvalent vs. Vaxcyte | Nuvalent vs. Viridian Therapeutics | Nuvalent vs. Ventyx Biosciences |
| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Eliem 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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