Correlation Between NextCure and Abcam PLC
Can any of the company-specific risk be diversified away by investing in both NextCure and Abcam PLC 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 NextCure and Abcam PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and Abcam PLC, you can compare the effects of market volatilities on NextCure and Abcam PLC 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 NextCure with a short position of Abcam PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Abcam PLC.
Diversification Opportunities for NextCure and Abcam PLC
Pay attention - limited upside
The 3 months correlation between NextCure and Abcam is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Abcam PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcam PLC and NextCure 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 NextCure are associated (or correlated) with Abcam PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcam PLC has no effect on the direction of NextCure i.e., NextCure and Abcam PLC go up and down completely randomly.
Pair Corralation between NextCure and Abcam PLC
Given the investment horizon of 90 days NextCure is expected to generate 5.35 times less return on investment than Abcam PLC. In addition to that, NextCure is 1.17 times more volatile than Abcam PLC. It trades about 0.02 of its total potential returns per unit of risk. Abcam PLC is currently generating about 0.1 per unit of volatility. If you would invest 1,545 in Abcam PLC on September 13, 2024 and sell it today you would earn a total of 814.00 from holding Abcam PLC or generate 52.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 29.29% |
| Values | Daily Returns |
NextCure vs. Abcam PLC
Performance |
| Timeline |
| NextCure |
| Abcam PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NextCure and Abcam PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and Abcam PLC
The main advantage of trading using opposite NextCure and Abcam PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Abcam PLC 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 Abcam PLC will offset losses from the drop in Abcam PLC's long position.| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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