Correlation Between DiaMedica Therapeutics and Nurix Therapeutics

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

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

Diversification Opportunities for DiaMedica Therapeutics and Nurix Therapeutics

-0.72

Correlation Coefficient

DiaMedica Therapeutics  Nurix Therapeutics

Pay attention - limited upside

The 3 months correlation between DiaMedica and Nurix is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding DiaMedica Therapeutics and Nurix Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nurix Therapeutics and DiaMedica 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 DiaMedica Therapeutics are associated (or correlated) with Nurix Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nurix Therapeutics has no effect on the direction of DiaMedica Therapeutics i.e., DiaMedica Therapeutics and Nurix Therapeutics go up and down completely randomly.

Pair Corralation between DiaMedica Therapeutics and Nurix Therapeutics

Given the investment horizon of 90 days DiaMedica Therapeutics is expected to generate 1.19 times less return on investment than Nurix Therapeutics. But when comparing it to its historical volatility, DiaMedica Therapeutics is 1.08 times less risky than Nurix Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Nurix Therapeutics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  663.00  in Nurix Therapeutics on October 5, 2024 and sell it today you would earn a total of  1,308  from holding Nurix Therapeutics or generate 197.29% return on investment over 90 days.

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

DiaMedica Therapeutics  vs.  Nurix Therapeutics

DiaMedica Therapeutics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DiaMedica Therapeutics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, DiaMedica Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nurix Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nurix Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Nurix Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DiaMedica Therapeutics and Nurix Therapeutics

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

The idea behind DiaMedica Therapeutics and Nurix Therapeutics 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..