Correlation Between Cogent Biosciences and Kalvista Pharmaceuticals

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Can any of the company-specific risk be diversified away by investing in both Cogent Biosciences and Kalvista Pharmaceuticals 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 Cogent Biosciences and Kalvista Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogent Biosciences and Kalvista Pharmaceuticals, you can compare the effects of market volatilities on Cogent Biosciences and Kalvista Pharmaceuticals 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 Cogent Biosciences with a short position of Kalvista Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Biosciences and Kalvista Pharmaceuticals.

Diversification Opportunities for Cogent Biosciences and Kalvista Pharmaceuticals

CogentKalvistaDiversified AwayCogentKalvistaDiversified Away100%
0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Cogent and Kalvista is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Biosciences and Kalvista Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalvista Pharmaceuticals and Cogent Biosciences 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 Cogent Biosciences are associated (or correlated) with Kalvista Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalvista Pharmaceuticals has no effect on the direction of Cogent Biosciences i.e., Cogent Biosciences and Kalvista Pharmaceuticals go up and down completely randomly.

Pair Corralation between Cogent Biosciences and Kalvista Pharmaceuticals

Given the investment horizon of 90 days Cogent Biosciences is expected to under-perform the Kalvista Pharmaceuticals. In addition to that, Cogent Biosciences is 1.02 times more volatile than Kalvista Pharmaceuticals. It trades about -0.39 of its total potential returns per unit of risk. Kalvista Pharmaceuticals is currently generating about 0.33 per unit of volatility. If you would invest  877.00  in Kalvista Pharmaceuticals on November 30, 2024 and sell it today you would earn a total of  209.00  from holding Kalvista Pharmaceuticals or generate 23.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cogent Biosciences  vs.  Kalvista Pharmaceuticals

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-5051015
JavaScript chart by amCharts 3.21.15COGT KALV
       Timeline  
Cogent Biosciences 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Cogent Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.577.588.599.51010.5
Kalvista Pharmaceuticals 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Kalvista Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Kalvista Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.588.599.51010.511

Cogent Biosciences and Kalvista Pharmaceuticals Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.05-4.53-3.01-1.490.01.342.734.125.516.89 0.0260.0270.0280.0290.030
JavaScript chart by amCharts 3.21.15COGT KALV
       Returns  

Pair Trading with Cogent Biosciences and Kalvista Pharmaceuticals

The main advantage of trading using opposite Cogent Biosciences and Kalvista Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Biosciences position performs unexpectedly, Kalvista Pharmaceuticals 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 Kalvista Pharmaceuticals will offset losses from the drop in Kalvista Pharmaceuticals' long position.
The idea behind Cogent Biosciences and Kalvista Pharmaceuticals 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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