Correlation Between Neximmune and Larimar Therapeutics

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

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

Diversification Opportunities for Neximmune and Larimar Therapeutics

-0.04

Correlation Coefficient

Neximmune  Larimar Therapeutics

Good diversification

The 3 months correlation between Neximmune and Larimar is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Neximmune and Larimar Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Larimar Therapeutics and Neximmune 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 Neximmune are associated (or correlated) with Larimar Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Larimar Therapeutics has no effect on the direction of Neximmune i.e., Neximmune and Larimar Therapeutics go up and down completely randomly.

Pair Corralation between Neximmune and Larimar Therapeutics

Given the investment horizon of 90 days Neximmune is expected to generate 2.86 times more return on investment than Larimar Therapeutics. However, Neximmune is 2.86 times more volatile than Larimar Therapeutics. It trades about 0.0 of its potential returns per unit of risk. Larimar Therapeutics is currently generating about -0.05 per unit of risk. If you would invest  314.00  in Neximmune on September 3, 2024 and sell it today you would lose (71.00) from holding Neximmune or give up 22.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	23.2%
Values	Daily Returns

Neximmune  vs.  Larimar Therapeutics

Neximmune

Risk-Adjusted Performance

0 of 100

Very Weak

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

Larimar Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Neximmune and Larimar Therapeutics

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

The idea behind Neximmune and Larimar 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.