Correlation Between NGM Biopharmaceutica and Nkarta

Can any of the company-specific risk be diversified away by investing in both NGM Biopharmaceutica 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 NGM Biopharmaceutica and Nkarta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NGM Biopharmaceuticals and Nkarta Inc, you can compare the effects of market volatilities on NGM Biopharmaceutica 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 NGM Biopharmaceutica with a short position of Nkarta. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGM Biopharmaceutica and Nkarta.

Diversification Opportunities for NGM Biopharmaceutica and Nkarta

0.0

Correlation Coefficient

NGM Biopharmaceutica  Nkarta

Pay attention - limited upside

The 3 months correlation between NGM and Nkarta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NGM Biopharmaceuticals and Nkarta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nkarta Inc and NGM Biopharmaceutica 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 NGM Biopharmaceuticals 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 NGM Biopharmaceutica i.e., NGM Biopharmaceutica and Nkarta go up and down completely randomly.

Pair Corralation between NGM Biopharmaceutica and Nkarta

If you would invest (100.00) in NGM Biopharmaceuticals on January 10, 2025 and sell it today you would earn a total of  100.00  from holding NGM Biopharmaceuticals or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NGM Biopharmaceuticals  vs.  Nkarta Inc

NGM Biopharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days NGM Biopharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, NGM Biopharmaceutica is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Nkarta Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nkarta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with NGM Biopharmaceutica and Nkarta

The main advantage of trading using opposite NGM Biopharmaceutica and Nkarta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGM Biopharmaceutica 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.

The idea behind NGM Biopharmaceuticals and Nkarta Inc 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.