Correlation Between Kiromic Biopharma and Navidea Biopharmaceutica

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

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

Diversification Opportunities for Kiromic Biopharma and Navidea Biopharmaceutica

0.56

Correlation Coefficient

Kiromic Biopharma  Navidea Biopharmaceutica

Very weak diversification

The 3 months correlation between Kiromic and Navidea is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kiromic Biopharma and Navidea Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navidea Biopharmaceutica and Kiromic 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 Kiromic Biopharma are associated (or correlated) with Navidea Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navidea Biopharmaceutica has no effect on the direction of Kiromic Biopharma i.e., Kiromic Biopharma and Navidea Biopharmaceutica go up and down completely randomly.

Pair Corralation between Kiromic Biopharma and Navidea Biopharmaceutica

Given the investment horizon of 90 days Kiromic Biopharma is expected to generate 1.27 times more return on investment than Navidea Biopharmaceutica. However, Kiromic Biopharma is 1.27 times more volatile than Navidea Biopharmaceuticals. It trades about -0.01 of its potential returns per unit of risk. Navidea Biopharmaceuticals is currently generating about -0.04 per unit of risk. If you would invest  720.00  in Kiromic Biopharma on September 3, 2024 and sell it today you would lose (452.00) from holding Kiromic Biopharma or give up 62.78% of portfolio value over 90 days.

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

Kiromic Biopharma  vs.  Navidea Biopharmaceuticals

Kiromic Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kiromic Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Kiromic Biopharma is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Navidea Biopharmaceutica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Navidea Biopharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Navidea Biopharmaceutica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kiromic Biopharma and Navidea Biopharmaceutica

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

The idea behind Kiromic Biopharma and Navidea Biopharmaceuticals 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.