Correlation Between Hepion Pharmaceuticals and Kinnate Biopharma

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

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

Diversification Opportunities for Hepion Pharmaceuticals and Kinnate Biopharma

0.31

Correlation Coefficient

Hepion Pharmaceuticals  Kinnate Biopharma

Weak diversification

The 3 months correlation between Hepion and Kinnate is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hepion Pharmaceuticals and Kinnate Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnate Biopharma and Hepion Pharmaceuticals 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 Hepion Pharmaceuticals are associated (or correlated) with Kinnate Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnate Biopharma has no effect on the direction of Hepion Pharmaceuticals i.e., Hepion Pharmaceuticals and Kinnate Biopharma go up and down completely randomly.

Pair Corralation between Hepion Pharmaceuticals and Kinnate Biopharma

If you would invest  296.00  in Kinnate Biopharma on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Kinnate Biopharma or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Hepion Pharmaceuticals  vs.  Kinnate Biopharma

Hepion Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hepion Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Kinnate Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinnate Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Kinnate Biopharma is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hepion Pharmaceuticals and Kinnate Biopharma

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

The idea behind Hepion Pharmaceuticals and Kinnate Biopharma 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.