Correlation Between Nkarta and Genenta Science

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

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

Diversification Opportunities for Nkarta and Genenta Science

-0.59

Correlation Coefficient

Nkarta  Genenta Science

Excellent diversification

The 3 months correlation between Nkarta and Genenta is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Genenta Science SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genenta Science SpA and Nkarta 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 Nkarta Inc are associated (or correlated) with Genenta Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genenta Science SpA has no effect on the direction of Nkarta i.e., Nkarta and Genenta Science go up and down completely randomly.

Pair Corralation between Nkarta and Genenta Science

Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Genenta Science. But the stock apears to be less risky and, when comparing its historical volatility, Nkarta Inc is 1.33 times less risky than Genenta Science. The stock trades about -0.15 of its potential returns per unit of risk. The Genenta Science SpA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  387.00  in Genenta Science SpA on August 30, 2024 and sell it today you would earn a total of  151.00  from holding Genenta Science SpA or generate 39.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Nkarta Inc  vs.  Genenta Science SpA

Nkarta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nkarta Inc 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 fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Genenta Science SpA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genenta Science SpA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Genenta Science sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nkarta and Genenta Science

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

The idea behind Nkarta Inc and Genenta Science SpA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.