Correlation Between Kineta and Protagenic Therapeutics

Can any of the company-specific risk be diversified away by investing in both Kineta and Protagenic 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 Protagenic 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 Protagenic Therapeutics, you can compare the effects of market volatilities on Kineta and Protagenic 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 Protagenic Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kineta and Protagenic Therapeutics.

Diversification Opportunities for Kineta and Protagenic Therapeutics

0.21

Correlation Coefficient

Kineta  Protagenic Therapeutics

Modest diversification

The 3 months correlation between Kineta and Protagenic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kineta Inc and Protagenic Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagenic 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 Protagenic Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagenic Therapeutics has no effect on the direction of Kineta i.e., Kineta and Protagenic Therapeutics go up and down completely randomly.

Pair Corralation between Kineta and Protagenic Therapeutics

Allowing for the 90-day total investment horizon Kineta Inc is expected to under-perform the Protagenic Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Kineta Inc is 1.09 times less risky than Protagenic Therapeutics. The stock trades about -0.01 of its potential returns per unit of risk. The Protagenic Therapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Protagenic Therapeutics on September 18, 2024 and sell it today you would lose (11.00) from holding Protagenic Therapeutics or give up 17.46% 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.  Protagenic 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.

Protagenic Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Protagenic Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Protagenic Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kineta and Protagenic Therapeutics

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

The idea behind Kineta Inc and Protagenic 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 CEOs Directory module to screen CEOs from public companies around the world.