Correlation Between HLS Therapeutics and Knight Therapeutics
Can any of the company-specific risk be diversified away by investing in both HLS Therapeutics and Knight Therapeutics 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 HLS Therapeutics and Knight Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HLS Therapeutics and Knight Therapeutics, you can compare the effects of market volatilities on HLS Therapeutics and Knight Therapeutics 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 HLS Therapeutics with a short position of Knight Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HLS Therapeutics and Knight Therapeutics.
Diversification Opportunities for HLS Therapeutics and Knight Therapeutics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HLS and Knight is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding HLS Therapeutics and Knight Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knight Therapeutics and HLS 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 HLS Therapeutics are associated (or correlated) with Knight Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knight Therapeutics has no effect on the direction of HLS Therapeutics i.e., HLS Therapeutics and Knight Therapeutics go up and down completely randomly.
Pair Corralation between HLS Therapeutics and Knight Therapeutics
Assuming the 90 days horizon HLS Therapeutics is expected to generate 2.01 times more return on investment than Knight Therapeutics. However, HLS Therapeutics is 2.01 times more volatile than Knight Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Knight Therapeutics is currently generating about -0.17 per unit of risk. If you would invest 250.00 in HLS Therapeutics on September 1, 2024 and sell it today you would earn a total of 10.00 from holding HLS Therapeutics or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HLS Therapeutics vs. Knight Therapeutics
Performance |
| Timeline |
| HLS Therapeutics |
| Knight Therapeutics |
HLS Therapeutics and Knight Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HLS Therapeutics and Knight Therapeutics
The main advantage of trading using opposite HLS Therapeutics and Knight Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HLS Therapeutics position performs unexpectedly, Knight Therapeutics 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 Knight Therapeutics will offset losses from the drop in Knight Therapeutics' long position.| HLS Therapeutics vs. Aion Therapeutic | HLS Therapeutics vs. Cannara Biotech | HLS Therapeutics vs. Knight Therapeutics | HLS Therapeutics vs. Canntab Therapeutics Limited |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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