Correlation Between Axim Biotechnologies and Kane Biotech
Can any of the company-specific risk be diversified away by investing in both Axim Biotechnologies and Kane Biotech 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 Axim Biotechnologies and Kane Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axim Biotechnologies and Kane Biotech, you can compare the effects of market volatilities on Axim Biotechnologies and Kane Biotech 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 Axim Biotechnologies with a short position of Kane Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axim Biotechnologies and Kane Biotech.
Diversification Opportunities for Axim Biotechnologies and Kane Biotech
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axim and Kane is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Axim Biotechnologies and Kane Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kane Biotech and Axim Biotechnologies 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 Axim Biotechnologies are associated (or correlated) with Kane Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kane Biotech has no effect on the direction of Axim Biotechnologies i.e., Axim Biotechnologies and Kane Biotech go up and down completely randomly.
Pair Corralation between Axim Biotechnologies and Kane Biotech
Given the investment horizon of 90 days Axim Biotechnologies is expected to generate 1.75 times less return on investment than Kane Biotech. In addition to that, Axim Biotechnologies is 2.67 times more volatile than Kane Biotech. It trades about 0.02 of its total potential returns per unit of risk. Kane Biotech is currently generating about 0.08 per unit of volatility. If you would invest 4.20 in Kane Biotech on September 1, 2024 and sell it today you would earn a total of 4.48 from holding Kane Biotech or generate 106.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axim Biotechnologies vs. Kane Biotech
Performance |
| Timeline |
| Axim Biotechnologies |
| Kane Biotech |
Axim Biotechnologies and Kane Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axim Biotechnologies and Kane Biotech
The main advantage of trading using opposite Axim Biotechnologies and Kane Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axim Biotechnologies position performs unexpectedly, Kane Biotech 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 Kane Biotech will offset losses from the drop in Kane Biotech's long position.| Axim Biotechnologies vs. Brainsway | Axim Biotechnologies vs. Venus Concept | Axim Biotechnologies vs. Tactile Systems Technology | Axim Biotechnologies vs. Icecure Medical |
| Kane Biotech vs. Rigel Pharmaceuticals | Kane Biotech vs. Geron | Kane Biotech vs. Verastem | Kane Biotech vs. Immutep Ltd ADR |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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