Correlation Between Epizyme and NantKwest

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Can any of the company-specific risk be diversified away by investing in both Epizyme and NantKwest 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 Epizyme and NantKwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epizyme and NantKwest, you can compare the effects of market volatilities on Epizyme and NantKwest 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 Epizyme with a short position of NantKwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epizyme and NantKwest.

Diversification Opportunities for Epizyme and NantKwest

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Epizyme and NantKwest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Epizyme and NantKwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NantKwest and Epizyme 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 Epizyme are associated (or correlated) with NantKwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NantKwest has no effect on the direction of Epizyme i.e., Epizyme and NantKwest go up and down completely randomly.

Pair Corralation between Epizyme and NantKwest

If you would invest (100.00) in NantKwest on December 29, 2023 and sell it today you would earn a total of  100.00  from holding NantKwest or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Epizyme  vs.  NantKwest

 Performance 
       Timeline  
Epizyme 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Epizyme has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Epizyme is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
NantKwest 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days NantKwest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, NantKwest is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Epizyme and NantKwest Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Epizyme and NantKwest

The main advantage of trading using opposite Epizyme and NantKwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epizyme position performs unexpectedly, NantKwest 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 NantKwest will offset losses from the drop in NantKwest's long position.
The idea behind Epizyme and NantKwest pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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