Correlation Between Zura Bio and Nkarta
Can any of the company-specific risk be diversified away by investing in both Zura Bio and Nkarta 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 Zura Bio and Nkarta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zura Bio Limited and Nkarta Inc, you can compare the effects of market volatilities on Zura Bio and Nkarta 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 Zura Bio with a short position of Nkarta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zura Bio and Nkarta.
Diversification Opportunities for Zura Bio and Nkarta
Poor diversification
The 3 months correlation between Zura and Nkarta is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zura Bio Limited and Nkarta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nkarta Inc and Zura Bio 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 Zura Bio Limited are associated (or correlated) with Nkarta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nkarta Inc has no effect on the direction of Zura Bio i.e., Zura Bio and Nkarta go up and down completely randomly.
Pair Corralation between Zura Bio and Nkarta
Given the investment horizon of 90 days Zura Bio Limited is expected to generate 1.14 times more return on investment than Nkarta. However, Zura Bio is 1.14 times more volatile than Nkarta Inc. It trades about -0.26 of its potential returns per unit of risk. Nkarta Inc is currently generating about -0.3 per unit of risk. If you would invest 166.00 in Zura Bio Limited on November 28, 2024 and sell it today you would lose (42.00) from holding Zura Bio Limited or give up 25.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zura Bio Limited vs. Nkarta Inc
Performance |
| Timeline |
| Zura Bio Limited |
| Nkarta Inc |
Zura Bio and Nkarta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zura Bio and Nkarta
The main advantage of trading using opposite Zura Bio and Nkarta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zura Bio position performs unexpectedly, Nkarta 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 Nkarta will offset losses from the drop in Nkarta's long position.| Zura Bio vs. Zhihu Inc ADR | Zura Bio vs. Arrow Electronics | Zura Bio vs. Western Digital | Zura Bio vs. Western Copper and |
| Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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