Correlation Between Khiron Life and IAnthus Capital
Can any of the company-specific risk be diversified away by investing in both Khiron Life and IAnthus Capital 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 Khiron Life and IAnthus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khiron Life Sciences and iAnthus Capital Holdings, you can compare the effects of market volatilities on Khiron Life and IAnthus Capital 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 Khiron Life with a short position of IAnthus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khiron Life and IAnthus Capital.
Diversification Opportunities for Khiron Life and IAnthus Capital
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Khiron and IAnthus is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences and iAnthus Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iAnthus Capital Holdings and Khiron Life 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 Khiron Life Sciences are associated (or correlated) with IAnthus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iAnthus Capital Holdings has no effect on the direction of Khiron Life i.e., Khiron Life and IAnthus Capital go up and down completely randomly.
Pair Corralation between Khiron Life and IAnthus Capital
Assuming the 90 days horizon Khiron Life Sciences is expected to under-perform the IAnthus Capital. In addition to that, Khiron Life is 1.42 times more volatile than iAnthus Capital Holdings. It trades about -0.22 of its total potential returns per unit of risk. iAnthus Capital Holdings is currently generating about 0.05 per unit of volatility. If you would invest 0.70 in iAnthus Capital Holdings on September 12, 2024 and sell it today you would lose (0.02) from holding iAnthus Capital Holdings or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Khiron Life Sciences vs. iAnthus Capital Holdings
Performance |
| Timeline |
| Khiron Life Sciences |
| iAnthus Capital Holdings |
Khiron Life and IAnthus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khiron Life and IAnthus Capital
The main advantage of trading using opposite Khiron Life and IAnthus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khiron Life position performs unexpectedly, IAnthus Capital 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 IAnthus Capital will offset losses from the drop in IAnthus Capital's long position.The idea behind Khiron Life Sciences and iAnthus Capital Holdings 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.| IAnthus Capital vs. 4Front Ventures Corp | IAnthus Capital vs. Khiron Life Sciences | IAnthus Capital vs. BellRock Brands | IAnthus Capital vs. Elixinol Global |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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