Correlation Between Century Therapeutics and Kinnate Biopharma

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

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

Diversification Opportunities for Century Therapeutics and Kinnate Biopharma

-0.06

Correlation Coefficient

Century Therapeutics  Kinnate Biopharma

Good diversification

The 3 months correlation between Century and Kinnate is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Kinnate Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnate Biopharma and Century 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 Century Therapeutics 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 Century Therapeutics i.e., Century Therapeutics and Kinnate Biopharma go up and down completely randomly.

Pair Corralation between Century Therapeutics and Kinnate Biopharma

Given the investment horizon of 90 days Century Therapeutics is expected to generate 0.79 times more return on investment than Kinnate Biopharma. However, Century Therapeutics is 1.26 times less risky than Kinnate Biopharma. It trades about -0.03 of its potential returns per unit of risk. Kinnate Biopharma is currently generating about -0.05 per unit of risk. If you would invest  478.00  in Century Therapeutics on September 28, 2024 and sell it today you would lose (374.00) from holding Century Therapeutics or give up 78.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	27.42%
Values	Daily Returns

Century Therapeutics  vs.  Kinnate Biopharma

Century Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Century Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 Century Therapeutics and Kinnate Biopharma

The main advantage of trading using opposite Century Therapeutics and Kinnate Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics 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 Century Therapeutics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.