Correlation Between NantKwest and Precision BioSciences

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

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

Diversification Opportunities for NantKwest and Precision BioSciences

0.0

Correlation Coefficient

NantKwest  Precision BioSciences

Pay attention - limited upside

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

Pair Corralation between NantKwest and Precision BioSciences

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	0.0%
Values	Daily Returns

NantKwest  vs.  Precision BioSciences

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 current stock price mess, may contribute to short-term losses for the institutional investors.

Precision BioSciences

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Precision BioSciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Precision BioSciences may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with NantKwest and Precision BioSciences

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

The idea behind NantKwest and Precision BioSciences 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.