Correlation Between Theriva Biologics and Kintara Therapeutics

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

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

Diversification Opportunities for Theriva Biologics and Kintara Therapeutics

0.56

Correlation Coefficient

Theriva Biologics  Kintara Therapeutics

Very weak diversification

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

Pair Corralation between Theriva Biologics and Kintara Therapeutics

Given the investment horizon of 90 days Theriva Biologics is expected to under-perform the Kintara Therapeutics. In addition to that, Theriva Biologics is 1.31 times more volatile than Kintara Therapeutics. It trades about -0.14 of its total potential returns per unit of risk. Kintara Therapeutics is currently generating about 0.01 per unit of volatility. If you would invest  669.00  in Kintara Therapeutics on September 17, 2024 and sell it today you would lose (39.00) from holding Kintara Therapeutics or give up 5.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	38.46%
Values	Daily Returns

Theriva Biologics  vs.  Kintara Therapeutics

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.

Kintara Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Theriva Biologics and Kintara Therapeutics

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

The idea behind Theriva Biologics and Kintara Therapeutics 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.