Correlation Between SPACE and Kodiak Sciences
Can any of the company-specific risk be diversified away by investing in both SPACE 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 SPACE and Kodiak Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPACE and Kodiak Sciences, you can compare the effects of market volatilities on SPACE 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 SPACE with a short position of Kodiak Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPACE and Kodiak Sciences.
Diversification Opportunities for SPACE and Kodiak Sciences
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPACE and Kodiak is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Kodiak Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Sciences and SPACE 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 SPACE 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 SPACE i.e., SPACE and Kodiak Sciences go up and down completely randomly.
Pair Corralation between SPACE and Kodiak Sciences
Assuming the 90 days horizon SPACE is expected to generate 38.29 times less return on investment than Kodiak Sciences. In addition to that, SPACE is 1.13 times more volatile than Kodiak Sciences. It trades about 0.0 of its total potential returns per unit of risk. Kodiak Sciences is currently generating about 0.1 per unit of volatility. If you would invest 394.00 in Kodiak Sciences on September 3, 2024 and sell it today you would earn a total of 273.00 from holding Kodiak Sciences or generate 69.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.32% |
| Values | Daily Returns |
SPACE vs. Kodiak Sciences
Performance |
| Timeline |
| SPACE |
| Kodiak Sciences |
SPACE and Kodiak Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPACE and Kodiak Sciences
The main advantage of trading using opposite SPACE and Kodiak Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPACE 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.The idea behind SPACE and Kodiak Sciences 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.| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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