Correlation Between Theriva Biologics and Kineta

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

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

Diversification Opportunities for Theriva Biologics and Kineta

-0.44

Correlation Coefficient

Theriva Biologics  Kineta

Very good diversification

The 3 months correlation between Theriva and Kineta is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Theriva Biologics and Kineta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kineta Inc and Theriva Biologics 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 Theriva Biologics are associated (or correlated) with Kineta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kineta Inc has no effect on the direction of Theriva Biologics i.e., Theriva Biologics and Kineta go up and down completely randomly.

Pair Corralation between Theriva Biologics and Kineta

Given the investment horizon of 90 days Theriva Biologics is expected to under-perform the Kineta. In addition to that, Theriva Biologics is 1.12 times more volatile than Kineta Inc. It trades about -0.14 of its total potential returns per unit of risk. Kineta Inc is currently generating about -0.08 per unit of volatility. If you would invest  83.00  in Kineta Inc on September 17, 2024 and sell it today you would lose (35.00) from holding Kineta Inc or give up 42.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	73.85%
Values	Daily Returns

Theriva Biologics  vs.  Kineta Inc

Theriva Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Theriva Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly 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.

Kineta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kineta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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 Theriva Biologics and Kineta

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

The idea behind Theriva Biologics and Kineta Inc 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.