Correlation Between Third Harmonic and NextCure
Can any of the company-specific risk be diversified away by investing in both Third Harmonic 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 Third Harmonic and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Third Harmonic Bio and NextCure, you can compare the effects of market volatilities on Third Harmonic 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 Third Harmonic with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Third Harmonic and NextCure.
Diversification Opportunities for Third Harmonic and NextCure
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Third and NextCure is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Third Harmonic Bio and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Third Harmonic 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 Third Harmonic Bio 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 Third Harmonic i.e., Third Harmonic and NextCure go up and down completely randomly.
Pair Corralation between Third Harmonic and NextCure
Given the investment horizon of 90 days Third Harmonic Bio is expected to generate 0.79 times more return on investment than NextCure. However, Third Harmonic Bio is 1.27 times less risky than NextCure. It trades about 0.05 of its potential returns per unit of risk. NextCure is currently generating about 0.02 per unit of risk. If you would invest 944.00 in Third Harmonic Bio on September 2, 2024 and sell it today you would earn a total of 332.00 from holding Third Harmonic Bio or generate 35.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Third Harmonic Bio vs. NextCure
Performance |
| Timeline |
| Third Harmonic Bio |
| NextCure |
Third Harmonic and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Third Harmonic and NextCure
The main advantage of trading using opposite Third Harmonic and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Third Harmonic 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.| Third Harmonic vs. Sensei Biotherapeutics | Third Harmonic vs. NextCure | Third Harmonic vs. Nuvation Bio | Third Harmonic vs. Cullinan Oncology LLC |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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