Correlation Between Equillium and Kiniksa Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Equillium and Kiniksa 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 Equillium and Kiniksa Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equillium and Kiniksa Pharmaceuticals, you can compare the effects of market volatilities on Equillium and Kiniksa 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 Equillium with a short position of Kiniksa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and Kiniksa Pharmaceuticals.
Diversification Opportunities for Equillium and Kiniksa Pharmaceuticals
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Equillium and Kiniksa is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Kiniksa Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiniksa Pharmaceuticals and Equillium 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 Equillium are associated (or correlated) with Kiniksa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiniksa Pharmaceuticals has no effect on the direction of Equillium i.e., Equillium and Kiniksa Pharmaceuticals go up and down completely randomly.
Pair Corralation between Equillium and Kiniksa Pharmaceuticals
Allowing for the 90-day total investment horizon Equillium is expected to generate 2.18 times more return on investment than Kiniksa Pharmaceuticals. However, Equillium is 2.18 times more volatile than Kiniksa Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Kiniksa Pharmaceuticals is currently generating about 0.05 per unit of risk. If you would invest 64.00 in Equillium on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Equillium or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equillium vs. Kiniksa Pharmaceuticals
Performance |
| Timeline |
| Equillium |
| Kiniksa Pharmaceuticals |
Equillium and Kiniksa Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equillium and Kiniksa Pharmaceuticals
The main advantage of trading using opposite Equillium and Kiniksa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium position performs unexpectedly, Kiniksa 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 Kiniksa Pharmaceuticals will offset losses from the drop in Kiniksa Pharmaceuticals' long position.| Equillium vs. Cue Biopharma | Equillium vs. Eliem Therapeutics | Equillium vs. Inhibrx | Equillium vs. Molecular Partners AG |
| Kiniksa Pharmaceuticals vs. Nuvalent | Kiniksa Pharmaceuticals vs. Ventyx Biosciences | Kiniksa Pharmaceuticals vs. Arcellx | Kiniksa Pharmaceuticals vs. Cullinan Oncology LLC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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