Correlation Between Kineta and Histogen

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

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

Diversification Opportunities for Kineta and Histogen

0.06

Correlation Coefficient

Kineta  Histogen

Significant diversification

The 3 months correlation between Kineta and Histogen is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kineta Inc and Histogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Histogen and Kineta 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 Kineta Inc are associated (or correlated) with Histogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Histogen has no effect on the direction of Kineta i.e., Kineta and Histogen go up and down completely randomly.

Pair Corralation between Kineta and Histogen

Allowing for the 90-day total investment horizon Kineta Inc is expected to generate 0.55 times more return on investment than Histogen. However, Kineta Inc is 1.82 times less risky than Histogen. It trades about -0.01 of its potential returns per unit of risk. Histogen is currently generating about -0.06 per unit of risk. If you would invest  57.00  in Kineta Inc on September 18, 2024 and sell it today you would lose (9.00) from holding Kineta Inc or give up 15.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	74.6%
Values	Daily Returns

Kineta Inc  vs.  Histogen

Kineta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kineta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kineta is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Histogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Histogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kineta and Histogen

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

The idea behind Kineta Inc and Histogen 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.