Correlation Between NextCure and Virax Biolabs
Can any of the company-specific risk be diversified away by investing in both NextCure and Virax Biolabs 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 Virax Biolabs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and Virax Biolabs Group, you can compare the effects of market volatilities on NextCure and Virax Biolabs 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 Virax Biolabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Virax Biolabs.
Diversification Opportunities for NextCure and Virax Biolabs
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NextCure and Virax is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Virax Biolabs Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virax Biolabs Group 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 Virax Biolabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virax Biolabs Group has no effect on the direction of NextCure i.e., NextCure and Virax Biolabs go up and down completely randomly.
Pair Corralation between NextCure and Virax Biolabs
Given the investment horizon of 90 days NextCure is expected to under-perform the Virax Biolabs. But the stock apears to be less risky and, when comparing its historical volatility, NextCure is 2.75 times less risky than Virax Biolabs. The stock trades about 0.0 of its potential returns per unit of risk. The Virax Biolabs Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 410.00 in Virax Biolabs Group on August 31, 2024 and sell it today you would lose (213.00) from holding Virax Biolabs Group or give up 51.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
NextCure vs. Virax Biolabs Group
Performance |
| Timeline |
| NextCure |
| Virax Biolabs Group |
NextCure and Virax Biolabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and Virax Biolabs
The main advantage of trading using opposite NextCure and Virax Biolabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Virax Biolabs 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 Virax Biolabs will offset losses from the drop in Virax Biolabs' long position.| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
| Virax Biolabs vs. Revelation Biosciences | Virax Biolabs vs. Kiora Pharmaceuticals | Virax Biolabs vs. Quoin Pharmaceuticals Ltd | Virax Biolabs vs. Neurobo Pharmaceuticals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |