Correlation Between Tonix Pharmaceuticals and NextCure
Can any of the company-specific risk be diversified away by investing in both Tonix Pharmaceuticals 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 Tonix Pharmaceuticals and NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tonix Pharmaceuticals Holding and NextCure, you can compare the effects of market volatilities on Tonix Pharmaceuticals 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 Tonix Pharmaceuticals with a short position of NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonix Pharmaceuticals and NextCure.
Diversification Opportunities for Tonix Pharmaceuticals and NextCure
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tonix and NextCure is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tonix Pharmaceuticals Holding and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Tonix Pharmaceuticals 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 Tonix Pharmaceuticals Holding 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 Tonix Pharmaceuticals i.e., Tonix Pharmaceuticals and NextCure go up and down completely randomly.
Pair Corralation between Tonix Pharmaceuticals and NextCure
Given the investment horizon of 90 days Tonix Pharmaceuticals Holding is expected to generate 1.72 times more return on investment than NextCure. However, Tonix Pharmaceuticals is 1.72 times more volatile than NextCure. It trades about 0.1 of its potential returns per unit of risk. NextCure is currently generating about -0.17 per unit of risk. If you would invest 17.00 in Tonix Pharmaceuticals Holding on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Tonix Pharmaceuticals Holding or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tonix Pharmaceuticals Holding vs. NextCure
Performance |
| Timeline |
| Tonix Pharmaceuticals |
| NextCure |
Tonix Pharmaceuticals and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tonix Pharmaceuticals and NextCure
The main advantage of trading using opposite Tonix Pharmaceuticals and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonix Pharmaceuticals 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.| Tonix Pharmaceuticals vs. Sonnet Biotherapeutics Holdings | Tonix Pharmaceuticals vs. Palisade Bio | Tonix Pharmaceuticals vs. Ibio Inc | Tonix Pharmaceuticals vs. Jaguar Animal Health |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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