Correlation Between NextCure and Kiora Pharmaceuticals

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

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

Diversification Opportunities for NextCure and Kiora Pharmaceuticals

0.13

Correlation Coefficient

NextCure  Kiora Pharmaceuticals

Average diversification

The 3 months correlation between NextCure and Kiora is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Kiora Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiora Pharmaceuticals and NextCure 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 NextCure are associated (or correlated) with Kiora Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiora Pharmaceuticals has no effect on the direction of NextCure i.e., NextCure and Kiora Pharmaceuticals go up and down completely randomly.

Pair Corralation between NextCure and Kiora Pharmaceuticals

Given the investment horizon of 90 days NextCure is expected to generate 0.62 times more return on investment than Kiora Pharmaceuticals. However, NextCure is 1.62 times less risky than Kiora Pharmaceuticals. It trades about 0.02 of its potential returns per unit of risk. Kiora Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest  123.00  in NextCure on September 14, 2024 and sell it today you would lose (14.00) from holding NextCure or give up 11.38% of portfolio value over 90 days.

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

NextCure  vs.  Kiora Pharmaceuticals

NextCure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NextCure 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 rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kiora Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kiora Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kiora Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with NextCure and Kiora Pharmaceuticals

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

The idea behind NextCure and Kiora Pharmaceuticals 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.