Correlation Between Immutep and NextCure

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

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

Diversification Opportunities for Immutep and NextCure

0.08

Correlation Coefficient

Immutep  NextCure

Significant diversification

The 3 months correlation between Immutep and NextCure is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Immutep Ltd ADR and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Immutep 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 Immutep Ltd ADR 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 Immutep i.e., Immutep and NextCure go up and down completely randomly.

Pair Corralation between Immutep and NextCure

Given the investment horizon of 90 days Immutep Ltd ADR is expected to generate 1.36 times more return on investment than NextCure. However, Immutep is 1.36 times more volatile than NextCure. It trades about -0.01 of its potential returns per unit of risk. NextCure is currently generating about -0.04 per unit of risk. If you would invest  269.00  in Immutep Ltd ADR on September 15, 2024 and sell it today you would lose (51.00) from holding Immutep Ltd ADR or give up 18.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Immutep Ltd ADR  vs.  NextCure

Immutep Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immutep Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Immutep is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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 January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Immutep and NextCure

The main advantage of trading using opposite Immutep and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immutep 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 Immutep Ltd ADR 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.