Correlation Between NextCure and Virpax Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both NextCure and Virpax Pharmaceuticals 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 Virpax Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and Virpax Pharmaceuticals, you can compare the effects of market volatilities on NextCure and Virpax Pharmaceuticals 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 Virpax Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Virpax Pharmaceuticals.
Diversification Opportunities for NextCure and Virpax Pharmaceuticals
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NextCure and Virpax is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Virpax Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virpax Pharmaceuticals 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 Virpax Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virpax Pharmaceuticals has no effect on the direction of NextCure i.e., NextCure and Virpax Pharmaceuticals go up and down completely randomly.
Pair Corralation between NextCure and Virpax Pharmaceuticals
Given the investment horizon of 90 days NextCure is expected to generate 0.26 times more return on investment than Virpax Pharmaceuticals. However, NextCure is 3.86 times less risky than Virpax Pharmaceuticals. It trades about -0.37 of its potential returns per unit of risk. Virpax Pharmaceuticals is currently generating about -0.18 per unit of risk. If you would invest 134.00 in NextCure on September 15, 2024 and sell it today you would lose (26.00) from holding NextCure or give up 19.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextCure vs. Virpax Pharmaceuticals
Performance |
| Timeline |
| NextCure |
| Virpax Pharmaceuticals |
NextCure and Virpax Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and Virpax Pharmaceuticals
The main advantage of trading using opposite NextCure and Virpax Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Virpax Pharmaceuticals 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 Virpax Pharmaceuticals will offset losses from the drop in Virpax Pharmaceuticals' long position.| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
| Virpax Pharmaceuticals vs. Revelation Biosciences | Virpax Pharmaceuticals vs. Palisade Bio | Virpax Pharmaceuticals vs. Virax Biolabs Group | Virpax Pharmaceuticals vs. Quoin Pharmaceuticals Ltd |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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