Correlation Between Kane Biotech and Awakn Life

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Can any of the company-specific risk be diversified away by investing in both Kane Biotech and Awakn Life 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 Kane Biotech and Awakn Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kane Biotech and Awakn Life Sciences, you can compare the effects of market volatilities on Kane Biotech and Awakn Life 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 Kane Biotech with a short position of Awakn Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kane Biotech and Awakn Life.

Diversification Opportunities for Kane Biotech and Awakn Life

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Kane and Awakn is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kane Biotech and Awakn Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awakn Life Sciences and Kane Biotech 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 Kane Biotech are associated (or correlated) with Awakn Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awakn Life Sciences has no effect on the direction of Kane Biotech i.e., Kane Biotech and Awakn Life go up and down completely randomly.

Pair Corralation between Kane Biotech and Awakn Life

Assuming the 90 days horizon Kane Biotech is expected to generate 1.02 times more return on investment than Awakn Life. However, Kane Biotech is 1.02 times more volatile than Awakn Life Sciences. It trades about 0.05 of its potential returns per unit of risk. Awakn Life Sciences is currently generating about -0.13 per unit of risk. If you would invest  7.67  in Kane Biotech on October 26, 2024 and sell it today you would earn a total of  0.33  from holding Kane Biotech or generate 4.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy97.62%
ValuesDaily Returns

Kane Biotech  vs.  Awakn Life Sciences

 Performance 
       Timeline  
Kane Biotech 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kane Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Awakn Life Sciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Awakn Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Kane Biotech and Awakn Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kane Biotech and Awakn Life

The main advantage of trading using opposite Kane Biotech and Awakn Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kane Biotech position performs unexpectedly, Awakn Life 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 Awakn Life will offset losses from the drop in Awakn Life's long position.
The idea behind Kane Biotech and Awakn Life 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.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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