Correlation Between Knight Therapeutics and HLS Therapeutics
Can any of the company-specific risk be diversified away by investing in both Knight Therapeutics and HLS 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 Knight Therapeutics and HLS Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Therapeutics and HLS Therapeutics, you can compare the effects of market volatilities on Knight Therapeutics and HLS 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 Knight Therapeutics with a short position of HLS Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Therapeutics and HLS Therapeutics.
Diversification Opportunities for Knight Therapeutics and HLS Therapeutics
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Knight and HLS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Knight Therapeutics and HLS Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLS Therapeutics and Knight 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 Knight Therapeutics are associated (or correlated) with HLS Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLS Therapeutics has no effect on the direction of Knight Therapeutics i.e., Knight Therapeutics and HLS Therapeutics go up and down completely randomly.
Pair Corralation between Knight Therapeutics and HLS Therapeutics
Assuming the 90 days horizon Knight Therapeutics is expected to under-perform the HLS Therapeutics. But the pink sheet apears to be less risky and, when comparing its historical volatility, Knight Therapeutics is 2.53 times less risky than HLS Therapeutics. The pink sheet trades about 0.0 of its potential returns per unit of risk. The HLS Therapeutics is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 274.00 in HLS Therapeutics on August 26, 2024 and sell it today you would lose (41.00) from holding HLS Therapeutics or give up 14.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Therapeutics vs. HLS Therapeutics
Performance |
| Timeline |
| Knight Therapeutics |
| HLS Therapeutics |
Knight Therapeutics and HLS Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Therapeutics and HLS Therapeutics
The main advantage of trading using opposite Knight Therapeutics and HLS Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Therapeutics position performs unexpectedly, HLS 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 HLS Therapeutics will offset losses from the drop in HLS Therapeutics' long position.| Knight Therapeutics vs. Rezolute | Knight Therapeutics vs. Tempest Therapeutics | Knight Therapeutics vs. Forte Biosciences | Knight Therapeutics vs. Dyadic International |
| HLS Therapeutics vs. Aion Therapeutic | HLS Therapeutics vs. Cannara Biotech | HLS Therapeutics vs. Knight Therapeutics | HLS Therapeutics vs. Canntab Therapeutics Limited |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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