Correlation Between Applied Molecular and NextCure

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

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

Diversification Opportunities for Applied Molecular and NextCure

0.0

Correlation Coefficient

Applied Molecular  NextCure

Pay attention - limited upside

The 3 months correlation between Applied and NextCure is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Applied Molecular Transport and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure and Applied Molecular 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 Applied Molecular Transport 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 Applied Molecular i.e., Applied Molecular and NextCure go up and down completely randomly.

Pair Corralation between Applied Molecular and NextCure

If you would invest (100.00) in Applied Molecular Transport on December 11, 2024 and sell it today you would earn a total of  100.00  from holding Applied Molecular Transport or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Applied Molecular Transport  vs.  NextCure

Applied Molecular

Risk-Adjusted Performance

Very Weak

Over the last 90 days Applied Molecular Transport has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Applied Molecular is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Applied Molecular and NextCure

The main advantage of trading using opposite Applied Molecular and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Molecular 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 Applied Molecular Transport 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.