Correlation Between Nkarta and Spyre Therapeutics

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

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

Diversification Opportunities for Nkarta and Spyre Therapeutics

-0.3

Correlation Coefficient

Nkarta  Spyre Therapeutics

Very good diversification

The 3 months correlation between Nkarta and Spyre is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nkarta Inc and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics 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 Spyre Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spyre Therapeutics has no effect on the direction of Nkarta i.e., Nkarta and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between Nkarta and Spyre Therapeutics

Given the investment horizon of 90 days Nkarta Inc is expected to under-perform the Spyre Therapeutics. In addition to that, Nkarta is 1.43 times more volatile than Spyre Therapeutics. It trades about -0.15 of its total potential returns per unit of risk. Spyre Therapeutics is currently generating about 0.05 per unit of volatility. If you would invest  2,660  in Spyre Therapeutics on September 2, 2024 and sell it today you would earn a total of  183.00  from holding Spyre Therapeutics or generate 6.88% return on investment over 90 days.

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

Nkarta Inc  vs.  Spyre Therapeutics

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 unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Spyre Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Spyre Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Spyre Therapeutics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nkarta and Spyre Therapeutics

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

The idea behind Nkarta Inc and Spyre 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.