Correlation Between Cognition Therapeutics and Kodiak Sciences
Can any of the company-specific risk be diversified away by investing in both Cognition Therapeutics and Kodiak Sciences 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 Cognition Therapeutics and Kodiak Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognition Therapeutics and Kodiak Sciences, you can compare the effects of market volatilities on Cognition Therapeutics and Kodiak Sciences 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 Cognition Therapeutics with a short position of Kodiak Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognition Therapeutics and Kodiak Sciences.
Diversification Opportunities for Cognition Therapeutics and Kodiak Sciences
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cognition and Kodiak is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cognition Therapeutics and Kodiak Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Sciences and Cognition Therapeutics 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 Cognition Therapeutics are associated (or correlated) with Kodiak Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Sciences has no effect on the direction of Cognition Therapeutics i.e., Cognition Therapeutics and Kodiak Sciences go up and down completely randomly.
Pair Corralation between Cognition Therapeutics and Kodiak Sciences
Given the investment horizon of 90 days Cognition Therapeutics is expected to generate 0.73 times more return on investment than Kodiak Sciences. However, Cognition Therapeutics is 1.38 times less risky than Kodiak Sciences. It trades about 0.03 of its potential returns per unit of risk. Kodiak Sciences is currently generating about -0.16 per unit of risk. If you would invest 77.00 in Cognition Therapeutics on October 26, 2024 and sell it today you would lose (0.08) from holding Cognition Therapeutics or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognition Therapeutics vs. Kodiak Sciences
Performance |
| Timeline |
| Cognition Therapeutics |
| Kodiak Sciences |
Cognition Therapeutics and Kodiak Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognition Therapeutics and Kodiak Sciences
The main advantage of trading using opposite Cognition Therapeutics and Kodiak Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognition Therapeutics position performs unexpectedly, Kodiak Sciences 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 Kodiak Sciences will offset losses from the drop in Kodiak Sciences' long position.| Cognition Therapeutics vs. Reviva Pharmaceuticals Holdings | Cognition Therapeutics vs. Eyenovia | Cognition Therapeutics vs. Transcode Therapeutics | Cognition Therapeutics vs. Kodiak Sciences |
| Kodiak Sciences vs. Reviva Pharmaceuticals Holdings | Kodiak Sciences vs. Eyenovia | Kodiak Sciences vs. Cognition Therapeutics | Kodiak Sciences vs. Transcode Therapeutics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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