Correlation Between Nkarta and Lyell Immunopharma
Can any of the company-specific risk be diversified away by investing in both Nkarta and Lyell Immunopharma 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 Nkarta and Lyell Immunopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nkarta Inc and Lyell Immunopharma, you can compare the effects of market volatilities on Nkarta and Lyell Immunopharma 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 Nkarta with a short position of Lyell Immunopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nkarta and Lyell Immunopharma.
Diversification Opportunities for Nkarta and Lyell Immunopharma
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nkarta and Lyell is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Lyell Immunopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyell Immunopharma and Nkarta 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 Nkarta Inc are associated (or correlated) with Lyell Immunopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyell Immunopharma has no effect on the direction of Nkarta i.e., Nkarta and Lyell Immunopharma go up and down completely randomly.
Pair Corralation between Nkarta and Lyell Immunopharma
Given the investment horizon of 90 days Nkarta Inc is expected to generate 0.8 times more return on investment than Lyell Immunopharma. However, Nkarta Inc is 1.24 times less risky than Lyell Immunopharma. It trades about -0.22 of its potential returns per unit of risk. Lyell Immunopharma is currently generating about -0.21 per unit of risk. If you would invest 538.00 in Nkarta Inc on July 21, 2024 and sell it today you would lose (112.00) from holding Nkarta Inc or give up 20.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nkarta Inc vs. Lyell Immunopharma
Performance |
Timeline |
Nkarta Inc |
Lyell Immunopharma |
Nkarta and Lyell Immunopharma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nkarta and Lyell Immunopharma
The main advantage of trading using opposite Nkarta and Lyell Immunopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nkarta position performs unexpectedly, Lyell Immunopharma 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 Lyell Immunopharma will offset losses from the drop in Lyell Immunopharma's long position.Nkarta vs. Monte Rosa Therapeutics | Nkarta vs. Lyell Immunopharma | Nkarta vs. Generation Bio Co | Nkarta vs. Sana Biotechnology |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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