Correlation Between BKV and Entrada Therapeutics
Can any of the company-specific risk be diversified away by investing in both BKV and Entrada 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 BKV and Entrada Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKV Corporation and Entrada Therapeutics, you can compare the effects of market volatilities on BKV and Entrada 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 BKV with a short position of Entrada Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKV and Entrada Therapeutics.
Diversification Opportunities for BKV and Entrada Therapeutics
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BKV and Entrada is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BKV Corp. and Entrada Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entrada Therapeutics and BKV 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 BKV Corporation are associated (or correlated) with Entrada Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entrada Therapeutics has no effect on the direction of BKV i.e., BKV and Entrada Therapeutics go up and down completely randomly.
Pair Corralation between BKV and Entrada Therapeutics
Considering the 90-day investment horizon BKV Corporation is expected to generate 0.48 times more return on investment than Entrada Therapeutics. However, BKV Corporation is 2.06 times less risky than Entrada Therapeutics. It trades about 0.17 of its potential returns per unit of risk. Entrada Therapeutics is currently generating about 0.04 per unit of risk. If you would invest 1,800 in BKV Corporation on September 24, 2024 and sell it today you would earn a total of 369.00 from holding BKV Corporation or generate 20.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 25.3% |
Values | Daily Returns |
BKV Corp. vs. Entrada Therapeutics
Performance |
Timeline |
BKV Corporation |
Entrada Therapeutics |
BKV and Entrada Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BKV and Entrada Therapeutics
The main advantage of trading using opposite BKV and Entrada Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKV position performs unexpectedly, Entrada 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 Entrada Therapeutics will offset losses from the drop in Entrada Therapeutics' long position.BKV vs. Antero Resources Corp | BKV vs. Empire Petroleum Corp | BKV vs. Permian Resources | BKV vs. SandRidge Energy |
Entrada Therapeutics vs. Molecular Partners AG | Entrada Therapeutics vs. Pmv Pharmaceuticals | Entrada Therapeutics vs. Monte Rosa Therapeutics | Entrada Therapeutics vs. Vigil Neuroscience |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |