Correlation Between Nautilus Biotechnology and C4 Therapeutics

Can any of the company-specific risk be diversified away by investing in both Nautilus Biotechnology and C4 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 Nautilus Biotechnology and C4 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nautilus Biotechnology and C4 Therapeutics, you can compare the effects of market volatilities on Nautilus Biotechnology and C4 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 Nautilus Biotechnology with a short position of C4 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nautilus Biotechnology and C4 Therapeutics.

Diversification Opportunities for Nautilus Biotechnology and C4 Therapeutics

0.77

Correlation Coefficient

Nautilus Biotechnology  C4 Therapeutics

Poor diversification

The 3 months correlation between Nautilus and CCCC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nautilus Biotechnology and C4 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C4 Therapeutics and Nautilus Biotechnology 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 Nautilus Biotechnology are associated (or correlated) with C4 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C4 Therapeutics has no effect on the direction of Nautilus Biotechnology i.e., Nautilus Biotechnology and C4 Therapeutics go up and down completely randomly.

Pair Corralation between Nautilus Biotechnology and C4 Therapeutics

Given the investment horizon of 90 days Nautilus Biotechnology is expected to generate 0.79 times more return on investment than C4 Therapeutics. However, Nautilus Biotechnology is 1.27 times less risky than C4 Therapeutics. It trades about -0.03 of its potential returns per unit of risk. C4 Therapeutics is currently generating about -0.06 per unit of risk. If you would invest  254.00  in Nautilus Biotechnology on September 3, 2024 and sell it today you would lose (30.00) from holding Nautilus Biotechnology or give up 11.81% of portfolio value over 90 days.

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

Nautilus Biotechnology  vs.  C4 Therapeutics

Nautilus Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nautilus Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

C4 Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C4 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental 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.

Pair Trading with Nautilus Biotechnology and C4 Therapeutics

The main advantage of trading using opposite Nautilus Biotechnology and C4 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nautilus Biotechnology position performs unexpectedly, C4 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 C4 Therapeutics will offset losses from the drop in C4 Therapeutics' long position.

The idea behind Nautilus Biotechnology and C4 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.