Correlation Between NextCure and Anpac Bio

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

By analyzing existing cross correlation between NextCure and Anpac Bio Medical, you can compare the effects of market volatilities on NextCure and Anpac Bio 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 Anpac Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and Anpac Bio.

Diversification Opportunities for NextCure and Anpac Bio

-0.43

Correlation Coefficient

NextCure  Anpac Bio

Very good diversification

The 3 months correlation between NextCure and Anpac is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Anpac Bio Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anpac Bio Medical 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 Anpac Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anpac Bio Medical has no effect on the direction of NextCure i.e., NextCure and Anpac Bio go up and down completely randomly.

Pair Corralation between NextCure and Anpac Bio

If you would invest  157.00  in NextCure on February 19, 2024 and sell it today you would earn a total of  10.00  from holding NextCure or generate 6.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

NextCure  vs.  Anpac Bio Medical

NextCure

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NextCure are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, NextCure exhibited solid returns over the last few months and may actually be approaching a breakup point.

Anpac Bio Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anpac Bio Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Anpac Bio is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NextCure and Anpac Bio

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

The idea behind NextCure and Anpac Bio Medical 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 Stocks Directory module to find actively traded stocks across global markets.