Correlation Between Nkarta and Alpha Teknova

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

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

Diversification Opportunities for Nkarta and Alpha Teknova

0.84

Correlation Coefficient

Nkarta  Alpha Teknova

Very poor diversification

The 3 months correlation between Nkarta and Alpha is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Alpha Teknova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Teknova 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 Alpha Teknova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Teknova has no effect on the direction of Nkarta i.e., Nkarta and Alpha Teknova go up and down completely randomly.

Pair Corralation between Nkarta and Alpha Teknova

Given the investment horizon of 90 days Nkarta Inc is expected to generate 1.41 times more return on investment than Alpha Teknova. However, Nkarta is 1.41 times more volatile than Alpha Teknova. It trades about 0.0 of its potential returns per unit of risk. Alpha Teknova is currently generating about -0.15 per unit of risk. If you would invest  232.00  in Nkarta Inc on December 28, 2024 and sell it today you would lose (32.00) from holding Nkarta Inc or give up 13.79% of portfolio value over 90 days.

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

Nkarta Inc  vs.  Alpha Teknova

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 fairly strong basic indicators, Nkarta is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Alpha Teknova

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha Teknova 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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Nkarta and Alpha Teknova

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

The idea behind Nkarta Inc and Alpha Teknova 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.