Correlation Between NFT and Enlivex Therapeutics

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

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

Diversification Opportunities for NFT and Enlivex Therapeutics

0.68

Correlation Coefficient

NFT  Enlivex Therapeutics

Poor diversification

The 3 months correlation between NFT and Enlivex is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding NFT Limited and Enlivex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlivex Therapeutics and NFT 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 NFT Limited are associated (or correlated) with Enlivex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlivex Therapeutics has no effect on the direction of NFT i.e., NFT and Enlivex Therapeutics go up and down completely randomly.

Pair Corralation between NFT and Enlivex Therapeutics

Allowing for the 90-day total investment horizon NFT Limited is expected to under-perform the Enlivex Therapeutics. In addition to that, NFT is 2.48 times more volatile than Enlivex Therapeutics. It trades about -0.06 of its total potential returns per unit of risk. Enlivex Therapeutics is currently generating about 0.03 per unit of volatility. If you would invest  130.00  in Enlivex Therapeutics on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Enlivex Therapeutics or generate 0.0% return on investment over 90 days.

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

NFT Limited  vs.  Enlivex Therapeutics

NFT Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NFT Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile forward indicators, NFT demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Enlivex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlivex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Enlivex Therapeutics is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with NFT and Enlivex Therapeutics

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

The idea behind NFT Limited and Enlivex 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.