Correlation Between Ikena Oncology and Kinnate Biopharma

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

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

Diversification Opportunities for Ikena Oncology and Kinnate Biopharma

0.23

Correlation Coefficient

Ikena Oncology  Kinnate Biopharma

Modest diversification

The 3 months correlation between Ikena and Kinnate is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and Kinnate Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnate Biopharma and Ikena Oncology 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 Ikena Oncology 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 Ikena Oncology i.e., Ikena Oncology and Kinnate Biopharma go up and down completely randomly.

Pair Corralation between Ikena Oncology 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	1.61%
Values	Daily Returns

Ikena Oncology  vs.  Kinnate Biopharma

Ikena Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ikena Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains 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 Ikena Oncology and Kinnate Biopharma

The main advantage of trading using opposite Ikena Oncology and Kinnate Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikena Oncology 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 Ikena Oncology 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.