Correlation Between NextCure and Achilles Therapeutics
Can any of the company-specific risk be diversified away by investing in both NextCure and Achilles Therapeutics 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 Achilles Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and Achilles Therapeutics PLC, you can compare the effects of market volatilities on NextCure and Achilles Therapeutics 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 Achilles Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Achilles Therapeutics.
Diversification Opportunities for NextCure and Achilles Therapeutics
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NextCure and Achilles is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Achilles Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Achilles Therapeutics 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 Achilles Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Achilles Therapeutics PLC has no effect on the direction of NextCure i.e., NextCure and Achilles Therapeutics go up and down completely randomly.
Pair Corralation between NextCure and Achilles Therapeutics
Given the investment horizon of 90 days NextCure is expected to generate 1.08 times more return on investment than Achilles Therapeutics. However, NextCure is 1.08 times more volatile than Achilles Therapeutics PLC. It trades about 0.02 of its potential returns per unit of risk. Achilles Therapeutics PLC is currently generating about -0.01 per unit of risk. If you would invest 141.00 in NextCure on August 23, 2024 and sell it today you would lose (12.00) from holding NextCure or give up 8.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextCure vs. Achilles Therapeutics PLC
Performance |
| Timeline |
| NextCure |
| Achilles Therapeutics PLC |
NextCure and Achilles Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and Achilles Therapeutics
The main advantage of trading using opposite NextCure and Achilles Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Achilles Therapeutics 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 Achilles Therapeutics will offset losses from the drop in Achilles Therapeutics' long position.| NextCure vs. Kiora Pharmaceuticals | NextCure vs. ZyVersa Therapeutics | NextCure vs. Sonnet Biotherapeutics Holdings | NextCure vs. Zura Bio Limited |
| Achilles Therapeutics vs. Assembly Biosciences | Achilles Therapeutics vs. Spero Therapeutics | Achilles Therapeutics vs. Instil Bio | Achilles Therapeutics vs. Nuvation Bio |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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