Correlation Between Mink Therapeutics and BKV

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

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

Diversification Opportunities for Mink Therapeutics and BKV

-0.5

Correlation Coefficient

Mink Therapeutics  BKV

Very good diversification

The 3 months correlation between Mink and BKV is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mink Therapeutics and BKV Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKV Corporation and Mink Therapeutics 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 Mink Therapeutics are associated (or correlated) with BKV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKV Corporation has no effect on the direction of Mink Therapeutics i.e., Mink Therapeutics and BKV go up and down completely randomly.

Pair Corralation between Mink Therapeutics and BKV

Given the investment horizon of 90 days Mink Therapeutics is expected to under-perform the BKV. In addition to that, Mink Therapeutics is 2.04 times more volatile than BKV Corporation. It trades about -0.1 of its total potential returns per unit of risk. BKV Corporation is currently generating about 0.19 per unit of volatility. If you would invest  1,829  in BKV Corporation on September 30, 2024 and sell it today you would earn a total of  424.00  from holding BKV Corporation or generate 23.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mink Therapeutics  vs.  BKV Corp.

Mink Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mink Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BKV Corporation

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BKV Corporation are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, BKV showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mink Therapeutics and BKV

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

The idea behind Mink Therapeutics and BKV Corporation 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.