Correlation Between NextCure and Aileron Therapeutics
Can any of the company-specific risk be diversified away by investing in both NextCure and Aileron 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 Aileron Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and Aileron Therapeutics, you can compare the effects of market volatilities on NextCure and Aileron 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 Aileron Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Aileron Therapeutics.
Diversification Opportunities for NextCure and Aileron Therapeutics
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between NextCure and Aileron is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Aileron Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aileron Therapeutics 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 Aileron Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aileron Therapeutics has no effect on the direction of NextCure i.e., NextCure and Aileron Therapeutics go up and down completely randomly.
Pair Corralation between NextCure and Aileron Therapeutics
Given the investment horizon of 90 days NextCure is expected to under-perform the Aileron Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, NextCure is 1.39 times less risky than Aileron Therapeutics. The stock trades about -0.01 of its potential returns per unit of risk. The Aileron Therapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 320.00 in Aileron Therapeutics on August 31, 2024 and sell it today you would lose (34.00) from holding Aileron Therapeutics or give up 10.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
NextCure vs. Aileron Therapeutics
Performance |
| Timeline |
| NextCure |
| Aileron Therapeutics |
NextCure and Aileron Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and Aileron Therapeutics
The main advantage of trading using opposite NextCure and Aileron Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Aileron 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 Aileron Therapeutics will offset losses from the drop in Aileron Therapeutics' long position.| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
| Aileron Therapeutics vs. Bio Path Holdings | Aileron Therapeutics vs. Benitec Biopharma Ltd | Aileron Therapeutics vs. Artelo Biosciences | Aileron Therapeutics vs. Histogen |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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