Correlation Between Senti Biosciences and NextCure
Can any of the company-specific risk be diversified away by investing in both Senti Biosciences and NextCure 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 Senti Biosciences and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senti Biosciences and NextCure, you can compare the effects of market volatilities on Senti Biosciences and NextCure 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 Senti Biosciences with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senti Biosciences and NextCure.
Diversification Opportunities for Senti Biosciences and NextCure
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senti and NextCure is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Senti Biosciences and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Senti Biosciences 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 Senti Biosciences are associated (or correlated) with NextCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCure has no effect on the direction of Senti Biosciences i.e., Senti Biosciences and NextCure go up and down completely randomly.
Pair Corralation between Senti Biosciences and NextCure
Given the investment horizon of 90 days Senti Biosciences is expected to generate 11.73 times more return on investment than NextCure. However, Senti Biosciences is 11.73 times more volatile than NextCure. It trades about 0.11 of its potential returns per unit of risk. NextCure is currently generating about -0.19 per unit of risk. If you would invest 209.00 in Senti Biosciences on November 18, 2024 and sell it today you would earn a total of 227.00 from holding Senti Biosciences or generate 108.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senti Biosciences vs. NextCure
Performance |
| Timeline |
| Senti Biosciences |
| NextCure |
Senti Biosciences and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senti Biosciences and NextCure
The main advantage of trading using opposite Senti Biosciences and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senti Biosciences position performs unexpectedly, NextCure 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 NextCure will offset losses from the drop in NextCure's long position.| Senti Biosciences vs. Cadrenal Therapeutics, Common | Senti Biosciences vs. Foghorn Therapeutics | Senti Biosciences vs. Quoin Pharmaceuticals Ltd | Senti Biosciences vs. SAB Biotherapeutics |
| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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