Correlation Between Nkarta and Enliven Therapeutics

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

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

Diversification Opportunities for Nkarta and Enliven Therapeutics

-0.58

Correlation Coefficient

Nkarta  Enliven Therapeutics

Excellent diversification

The 3 months correlation between Nkarta and Enliven is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Enliven Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enliven Therapeutics and Nkarta 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 Nkarta Inc are associated (or correlated) with Enliven Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enliven Therapeutics has no effect on the direction of Nkarta i.e., Nkarta and Enliven Therapeutics go up and down completely randomly.

Pair Corralation between Nkarta and Enliven Therapeutics

Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Enliven Therapeutics. In addition to that, Nkarta is 1.87 times more volatile than Enliven Therapeutics. It trades about -0.15 of its total potential returns per unit of risk. Enliven Therapeutics is currently generating about 0.1 per unit of volatility. If you would invest  2,188  in Enliven Therapeutics on August 30, 2024 and sell it today you would earn a total of  353.00  from holding Enliven Therapeutics or generate 16.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Nkarta Inc  vs.  Enliven Therapeutics

Nkarta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nkarta Inc 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 fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Enliven Therapeutics

Risk-Adjusted Performance

7 of 100

Modest

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

Pair Trading with Nkarta and Enliven Therapeutics

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

The idea behind Nkarta Inc and Enliven 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.