Correlation Between Viking Therapeutics and Nurix Therapeutics

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

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

Diversification Opportunities for Viking Therapeutics and Nurix Therapeutics

0.72

Correlation Coefficient

Viking Therapeutics  Nurix Therapeutics

Poor diversification

The 3 months correlation between Viking and Nurix is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Nurix Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nurix Therapeutics and Viking Therapeutics 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 Viking Therapeutics are associated (or correlated) with Nurix Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nurix Therapeutics has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and Nurix Therapeutics go up and down completely randomly.

Pair Corralation between Viking Therapeutics and Nurix Therapeutics

Given the investment horizon of 90 days Viking Therapeutics is expected to under-perform the Nurix Therapeutics. In addition to that, Viking Therapeutics is 1.56 times more volatile than Nurix Therapeutics. It trades about -0.12 of its total potential returns per unit of risk. Nurix Therapeutics is currently generating about -0.03 per unit of volatility. If you would invest  2,006  in Nurix Therapeutics on October 6, 2024 and sell it today you would lose (55.00) from holding Nurix Therapeutics or give up 2.74% of portfolio value over 90 days.

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

Viking Therapeutics  vs.  Nurix Therapeutics

Viking Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viking Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nurix Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Viking Therapeutics and Nurix Therapeutics

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

The idea behind Viking Therapeutics and Nurix 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.