Correlation Between NextCure and Sensei Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both NextCure and Sensei Biotherapeutics 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 Sensei Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and Sensei Biotherapeutics, you can compare the effects of market volatilities on NextCure and Sensei Biotherapeutics 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 Sensei Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Sensei Biotherapeutics.
Diversification Opportunities for NextCure and Sensei Biotherapeutics
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NextCure and Sensei is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Sensei Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensei Biotherapeutics 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 Sensei Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensei Biotherapeutics has no effect on the direction of NextCure i.e., NextCure and Sensei Biotherapeutics go up and down completely randomly.
Pair Corralation between NextCure and Sensei Biotherapeutics
Given the investment horizon of 90 days NextCure is expected to generate 1.3 times less return on investment than Sensei Biotherapeutics. But when comparing it to its historical volatility, NextCure is 1.7 times less risky than Sensei Biotherapeutics. It trades about 0.01 of its potential returns per unit of risk. Sensei Biotherapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 160.00 in Sensei Biotherapeutics on August 28, 2024 and sell it today you would lose (100.00) from holding Sensei Biotherapeutics or give up 62.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextCure vs. Sensei Biotherapeutics
Performance |
| Timeline |
| NextCure |
| Sensei Biotherapeutics |
NextCure and Sensei Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and Sensei Biotherapeutics
The main advantage of trading using opposite NextCure and Sensei Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Sensei Biotherapeutics 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 Sensei Biotherapeutics will offset losses from the drop in Sensei Biotherapeutics' long position.| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
| Sensei Biotherapeutics vs. Eliem Therapeutics | Sensei Biotherapeutics vs. Scpharmaceuticals | Sensei Biotherapeutics vs. Milestone Pharmaceuticals | Sensei Biotherapeutics vs. Seres 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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