Correlation Between Kinnate Biopharma and Ambrx Biopharma

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

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

Diversification Opportunities for Kinnate Biopharma and Ambrx Biopharma

0.29

Correlation Coefficient

Kinnate Biopharma  Ambrx Biopharma

Modest diversification

The 3 months correlation between Kinnate and Ambrx is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kinnate Biopharma and Ambrx Biopharma American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambrx Biopharma American and Kinnate Biopharma 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 Kinnate Biopharma are associated (or correlated) with Ambrx Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambrx Biopharma American has no effect on the direction of Kinnate Biopharma i.e., Kinnate Biopharma and Ambrx Biopharma go up and down completely randomly.

Pair Corralation between Kinnate Biopharma and Ambrx Biopharma

Given the investment horizon of 90 days Kinnate Biopharma is expected to under-perform the Ambrx Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, Kinnate Biopharma is 1.1 times less risky than Ambrx Biopharma. The stock trades about -0.05 of its potential returns per unit of risk. The Ambrx Biopharma American is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,456  in Ambrx Biopharma American on September 30, 2024 and sell it today you would earn a total of  117.00  from holding Ambrx Biopharma American or generate 8.04% return on investment over 90 days.

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

Kinnate Biopharma  vs.  Ambrx Biopharma American

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.

Ambrx Biopharma American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ambrx Biopharma American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ambrx Biopharma is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kinnate Biopharma and Ambrx Biopharma

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

The idea behind Kinnate Biopharma and Ambrx Biopharma American 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.