Correlation Between Nkarta and OptiNose

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

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

Diversification Opportunities for Nkarta and OptiNose

0.7

Correlation Coefficient

Nkarta  OptiNose

Poor diversification

The 3 months correlation between Nkarta and OptiNose is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose 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 OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of Nkarta i.e., Nkarta and OptiNose go up and down completely randomly.

Pair Corralation between Nkarta and OptiNose

Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the OptiNose. In addition to that, Nkarta is 1.49 times more volatile than OptiNose. It trades about -0.27 of its total potential returns per unit of risk. OptiNose is currently generating about -0.29 per unit of volatility. If you would invest  639.00  in OptiNose on November 28, 2024 and sell it today you would lose (104.00) from holding OptiNose or give up 16.28% of portfolio value over 90 days.

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

Nkarta Inc  vs.  OptiNose

Nkarta Inc

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

OptiNose

Risk-Adjusted Performance

Very Weak

Over the last 90 days OptiNose has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Nkarta and OptiNose

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

The idea behind Nkarta Inc and OptiNose 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.