Correlation Between VTv Therapeutics and NextCure

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

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

Diversification Opportunities for VTv Therapeutics and NextCure

-0.14

Correlation Coefficient

VTv Therapeutics  NextCure

Good diversification

The 3 months correlation between VTv and NextCure is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding vTv Therapeutics and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and VTv 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 vTv Therapeutics are associated (or correlated) with NextCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCure has no effect on the direction of VTv Therapeutics i.e., VTv Therapeutics and NextCure go up and down completely randomly.

Pair Corralation between VTv Therapeutics and NextCure

Given the investment horizon of 90 days vTv Therapeutics is expected to under-perform the NextCure. But the stock apears to be less risky and, when comparing its historical volatility, vTv Therapeutics is 1.85 times less risky than NextCure. The stock trades about -0.16 of its potential returns per unit of risk. The NextCure is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  540.00  in NextCure on May 4, 2025 and sell it today you would lose (51.00) from holding NextCure or give up 9.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

vTv Therapeutics  vs.  NextCure

vTv Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days vTv Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

NextCure

Risk-Adjusted Performance

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 rather sound basic indicators, NextCure is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VTv Therapeutics and NextCure

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

The idea behind vTv Therapeutics and NextCure 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.