Correlation Between Kinnate Biopharma and Ikena Oncology

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

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

Diversification Opportunities for Kinnate Biopharma and Ikena Oncology

0.23

Correlation Coefficient

Kinnate Biopharma  Ikena Oncology

Modest diversification

The 3 months correlation between Kinnate and Ikena is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kinnate Biopharma and Ikena Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikena Oncology 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 Ikena Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikena Oncology has no effect on the direction of Kinnate Biopharma i.e., Kinnate Biopharma and Ikena Oncology go up and down completely randomly.

Pair Corralation between Kinnate Biopharma and Ikena Oncology

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	5.0%
Values	Daily Returns

Kinnate Biopharma  vs.  Ikena Oncology

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.

Ikena Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ikena Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 Kinnate Biopharma and Ikena Oncology

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

The idea behind Kinnate Biopharma and Ikena Oncology 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.