Correlation Between Kineta and Lisata Therapeutics

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

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

Diversification Opportunities for Kineta and Lisata Therapeutics

0.28

Correlation Coefficient

Kineta  Lisata Therapeutics

Modest diversification

The 3 months correlation between Kineta and Lisata is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kineta Inc and Lisata Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisata Therapeutics 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 Lisata Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisata Therapeutics has no effect on the direction of Kineta i.e., Kineta and Lisata Therapeutics go up and down completely randomly.

Pair Corralation between Kineta and Lisata Therapeutics

Allowing for the 90-day total investment horizon Kineta Inc is expected to generate 2.57 times more return on investment than Lisata Therapeutics. However, Kineta is 2.57 times more volatile than Lisata Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Lisata Therapeutics is currently generating about -0.05 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	Very Weak
Accuracy	74.6%
Values	Daily Returns

Kineta Inc  vs.  Lisata Therapeutics

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.

Lisata Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lisata Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

Pair Trading with Kineta and Lisata Therapeutics

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

The idea behind Kineta Inc and Lisata Therapeutics 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.