Correlation Between Journey Medical and Kala Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Journey Medical and Kala 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 Journey Medical and Kala Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Journey Medical Corp and Kala Pharmaceuticals, you can compare the effects of market volatilities on Journey Medical and Kala 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 Journey Medical with a short position of Kala Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Journey Medical and Kala Pharmaceuticals.
Diversification Opportunities for Journey Medical and Kala Pharmaceuticals
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Journey and Kala is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Journey Medical Corp and Kala Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kala Pharmaceuticals and Journey Medical 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 Journey Medical Corp are associated (or correlated) with Kala Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kala Pharmaceuticals has no effect on the direction of Journey Medical i.e., Journey Medical and Kala Pharmaceuticals go up and down completely randomly.
Pair Corralation between Journey Medical and Kala Pharmaceuticals
Given the investment horizon of 90 days Journey Medical Corp is expected to generate 1.3 times more return on investment than Kala Pharmaceuticals. However, Journey Medical is 1.3 times more volatile than Kala Pharmaceuticals. It trades about -0.02 of its potential returns per unit of risk. Kala Pharmaceuticals is currently generating about -0.04 per unit of risk. If you would invest 600.00 in Journey Medical Corp on August 27, 2024 and sell it today you would lose (26.00) from holding Journey Medical Corp or give up 4.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Journey Medical Corp vs. Kala Pharmaceuticals
Performance |
| Timeline |
| Journey Medical Corp |
| Kala Pharmaceuticals |
Journey Medical and Kala Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Journey Medical and Kala Pharmaceuticals
The main advantage of trading using opposite Journey Medical and Kala Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Journey Medical position performs unexpectedly, Kala 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 Kala Pharmaceuticals will offset losses from the drop in Kala Pharmaceuticals' long position.| Journey Medical vs. Evoke Pharma | Journey Medical vs. Avadel Pharmaceuticals PLC | Journey Medical vs. Aquestive Therapeutics | Journey Medical vs. Cresco Labs |
| Kala Pharmaceuticals vs. Lifecore Biomedical | Kala Pharmaceuticals vs. Shuttle Pharmaceuticals | Kala Pharmaceuticals vs. Journey Medical Corp | Kala Pharmaceuticals vs. Akanda Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |