Correlation Between NextCure and Comera Life

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

By analyzing existing cross correlation between NextCure and Comera Life Sciences, you can compare the effects of market volatilities on NextCure and Comera Life 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 NextCure with a short position of Comera Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Comera Life.

Diversification Opportunities for NextCure and Comera Life

-0.07

Correlation Coefficient

NextCure  Comera Life

Good diversification

The 3 months correlation between NextCure and Comera is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Comera Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comera Life Sciences and NextCure 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 NextCure are associated (or correlated) with Comera Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comera Life Sciences has no effect on the direction of NextCure i.e., NextCure and Comera Life go up and down completely randomly.

Pair Corralation between NextCure and Comera Life

If you would invest  66.00  in Comera Life Sciences on June 24, 2024 and sell it today you would earn a total of  0.00  from holding Comera Life Sciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

NextCure  vs.  Comera Life Sciences

NextCure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NextCure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in October 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Comera Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comera Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Comera Life is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NextCure and Comera Life

The main advantage of trading using opposite NextCure and Comera Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, Comera Life 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 Comera Life will offset losses from the drop in Comera Life's long position.

The idea behind NextCure and Comera Life Sciences 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.