Correlation Between Nektar Therapeutics and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both Nektar Therapeutics and Meta Platforms 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 Nektar Therapeutics and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nektar Therapeutics and Meta Platforms, you can compare the effects of market volatilities on Nektar Therapeutics and Meta Platforms 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 Nektar Therapeutics with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nektar Therapeutics and Meta Platforms.
Diversification Opportunities for Nektar Therapeutics and Meta Platforms
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nektar and Meta is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nektar Therapeutics and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and Nektar Therapeutics 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 Nektar Therapeutics are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Nektar Therapeutics i.e., Nektar Therapeutics and Meta Platforms go up and down completely randomly.
Pair Corralation between Nektar Therapeutics and Meta Platforms
If you would invest 90.00 in Nektar Therapeutics on January 26, 2024 and sell it today you would earn a total of 48.00 from holding Nektar Therapeutics or generate 53.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 4.55% |
Values | Daily Returns |
Nektar Therapeutics vs. Meta Platforms
Performance |
Timeline |
Nektar Therapeutics |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nektar Therapeutics and Meta Platforms Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nektar Therapeutics and Meta Platforms
The main advantage of trading using opposite Nektar Therapeutics and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nektar Therapeutics position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.Nektar Therapeutics vs. Shuttle Pharmaceuticals | Nektar Therapeutics vs. Lifecore Biomedical | Nektar Therapeutics vs. Lucy Scientific Discovery |
Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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