Correlation Between Kinnate Biopharma and Hepion Pharmaceuticals

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

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

Diversification Opportunities for Kinnate Biopharma and Hepion Pharmaceuticals

0.31

Correlation Coefficient

Kinnate Biopharma  Hepion Pharmaceuticals

Weak diversification

The 3 months correlation between Kinnate and Hepion is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kinnate Biopharma and Hepion Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hepion Pharmaceuticals 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 Hepion Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hepion Pharmaceuticals has no effect on the direction of Kinnate Biopharma i.e., Kinnate Biopharma and Hepion Pharmaceuticals go up and down completely randomly.

Pair Corralation between Kinnate Biopharma and Hepion Pharmaceuticals

If you would invest  296.00  in Kinnate Biopharma on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Kinnate Biopharma or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.8%
Values	Daily Returns

Kinnate Biopharma  vs.  Hepion Pharmaceuticals

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.

Hepion Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hepion Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kinnate Biopharma and Hepion Pharmaceuticals

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

The idea behind Kinnate Biopharma and Hepion Pharmaceuticals 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.