Correlation Between Kronos Bio and InflaRx NV

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

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

Diversification Opportunities for Kronos Bio and InflaRx NV

0.13

Correlation Coefficient

Kronos Bio  InflaRx NV

Average diversification

The 3 months correlation between Kronos and InflaRx is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Bio and InflaRx NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InflaRx NV and Kronos Bio 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 Kronos Bio are associated (or correlated) with InflaRx NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InflaRx NV has no effect on the direction of Kronos Bio i.e., Kronos Bio and InflaRx NV go up and down completely randomly.

Pair Corralation between Kronos Bio and InflaRx NV

Given the investment horizon of 90 days Kronos Bio is expected to generate 7.08 times less return on investment than InflaRx NV. But when comparing it to its historical volatility, Kronos Bio is 1.19 times less risky than InflaRx NV. It trades about 0.03 of its potential returns per unit of risk. InflaRx NV is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  145.00  in InflaRx NV on September 16, 2024 and sell it today you would earn a total of  91.00  from holding InflaRx NV or generate 62.76% return on investment over 90 days.

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

Kronos Bio  vs.  InflaRx NV

Kronos Bio

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kronos Bio are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Kronos Bio may actually be approaching a critical reversion point that can send shares even higher in January 2025.

InflaRx NV

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in InflaRx NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, InflaRx NV showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kronos Bio and InflaRx NV

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

The idea behind Kronos Bio and InflaRx NV 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.