Correlation Between NextCure and Entera Bio
Can any of the company-specific risk be diversified away by investing in both NextCure and Entera Bio 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 Entera Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and Entera Bio, you can compare the effects of market volatilities on NextCure and Entera Bio 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 Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Entera Bio.
Diversification Opportunities for NextCure and Entera Bio
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NextCure and Entera is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio 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 Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of NextCure i.e., NextCure and Entera Bio go up and down completely randomly.
Pair Corralation between NextCure and Entera Bio
Given the investment horizon of 90 days NextCure is expected to under-perform the Entera Bio. But the stock apears to be less risky and, when comparing its historical volatility, NextCure is 1.96 times less risky than Entera Bio. The stock trades about -0.37 of its potential returns per unit of risk. The Entera Bio is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 178.00 in Entera Bio on September 15, 2024 and sell it today you would earn a total of 42.00 from holding Entera Bio or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextCure vs. Entera Bio
Performance |
| Timeline |
| NextCure |
| Entera Bio |
NextCure and Entera Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and Entera Bio
The main advantage of trading using opposite NextCure and Entera Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Entera Bio 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 Entera Bio will offset losses from the drop in Entera Bio's long position.| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
| Entera Bio vs. Puma Biotechnology | Entera Bio vs. Iovance Biotherapeutics | Entera Bio vs. Day One Biopharmaceuticals | Entera Bio vs. Inozyme Pharma |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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