Correlation Between Auris Medical and NantKwest

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

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

Diversification Opportunities for Auris Medical and NantKwest

0.0

Correlation Coefficient

Auris Medical  NantKwest

Pay attention - limited upside

The 3 months correlation between Auris and NantKwest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Auris Medical Holding and NantKwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NantKwest and Auris Medical 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 Auris Medical Holding are associated (or correlated) with NantKwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NantKwest has no effect on the direction of Auris Medical i.e., Auris Medical and NantKwest go up and down completely randomly.

Pair Corralation between Auris Medical and NantKwest

If you would invest (100.00) in NantKwest on January 25, 2024 and sell it today you would earn a total of  100.00  from holding NantKwest or generate -100.0% return on investment over 90 days.

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

Auris Medical Holding  vs.  NantKwest

Auris Medical Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auris Medical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Auris Medical is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

NantKwest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NantKwest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, NantKwest is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Auris Medical and NantKwest

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

The idea behind Auris Medical Holding and NantKwest 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.