Correlation Between NextCure and Theseus Pharmaceuticals

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

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

Diversification Opportunities for NextCure and Theseus Pharmaceuticals

0.0

Correlation Coefficient

NextCure  Theseus Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between NextCure and Theseus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Theseus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theseus 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 Theseus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theseus Pharmaceuticals has no effect on the direction of NextCure i.e., NextCure and Theseus Pharmaceuticals go up and down completely randomly.

Pair Corralation between NextCure and Theseus Pharmaceuticals

If you would invest (100.00) in Theseus Pharmaceuticals on November 28, 2024 and sell it today you would earn a total of  100.00  from holding Theseus Pharmaceuticals or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NextCure  vs.  Theseus Pharmaceuticals

NextCure

Risk-Adjusted Performance

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 March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Theseus Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Theseus Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Theseus Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NextCure and Theseus Pharmaceuticals

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

The idea behind NextCure and Theseus 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.