Correlation Between NextCure and Instil Bio
Can any of the company-specific risk be diversified away by investing in both NextCure and Instil 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 Instil Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and Instil Bio, you can compare the effects of market volatilities on NextCure and Instil 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 Instil Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Instil Bio.
Diversification Opportunities for NextCure and Instil Bio
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NextCure and Instil is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil 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 Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of NextCure i.e., NextCure and Instil Bio go up and down completely randomly.
Pair Corralation between NextCure and Instil Bio
Given the investment horizon of 90 days NextCure is expected to under-perform the Instil Bio. But the stock apears to be less risky and, when comparing its historical volatility, NextCure is 1.34 times less risky than Instil Bio. The stock trades about -0.18 of its potential returns per unit of risk. The Instil Bio is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,008 in Instil Bio on October 20, 2024 and sell it today you would earn a total of 89.00 from holding Instil Bio or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextCure vs. Instil Bio
Performance |
| Timeline |
| NextCure |
| Instil Bio |
NextCure and Instil Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and Instil Bio
The main advantage of trading using opposite NextCure and Instil Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Instil 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 Instil Bio will offset losses from the drop in Instil Bio's long position.| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
| Instil Bio vs. Assembly Biosciences | Instil Bio vs. Nuvation Bio | Instil Bio vs. Achilles Therapeutics PLC | Instil Bio vs. NextCure |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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