Correlation Between NextCure and Anavex Life
Can any of the company-specific risk be diversified away by investing in both NextCure and Anavex Life 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 Anavex Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and Anavex Life Sciences, you can compare the effects of market volatilities on NextCure and Anavex Life 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 Anavex Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Anavex Life.
Diversification Opportunities for NextCure and Anavex Life
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NextCure and Anavex is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Anavex Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anavex Life Sciences 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 Anavex Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anavex Life Sciences has no effect on the direction of NextCure i.e., NextCure and Anavex Life go up and down completely randomly.
Pair Corralation between NextCure and Anavex Life
Given the investment horizon of 90 days NextCure is expected to under-perform the Anavex Life. But the stock apears to be less risky and, when comparing its historical volatility, NextCure is 2.03 times less risky than Anavex Life. The stock trades about -0.37 of its potential returns per unit of risk. The Anavex Life Sciences is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 803.00 in Anavex Life Sciences on September 15, 2024 and sell it today you would earn a total of 27.00 from holding Anavex Life Sciences or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextCure vs. Anavex Life Sciences
Performance |
| Timeline |
| NextCure |
| Anavex Life Sciences |
NextCure and Anavex Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and Anavex Life
The main advantage of trading using opposite NextCure and Anavex Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Anavex Life 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 Anavex Life will offset losses from the drop in Anavex Life's long position.| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
| Anavex Life vs. Cassava Sciences | Anavex Life vs. INmune Bio | Anavex Life vs. Biovie Inc | Anavex Life vs. Cognition 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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