Correlation Between Kura Oncology and Adagene
Can any of the company-specific risk be diversified away by investing in both Kura Oncology and Adagene 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 Kura Oncology and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kura Oncology and Adagene, you can compare the effects of market volatilities on Kura Oncology and Adagene 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 Kura Oncology with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Oncology and Adagene.
Diversification Opportunities for Kura Oncology and Adagene
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kura and Adagene is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kura Oncology and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Kura Oncology 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 Kura Oncology are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Kura Oncology i.e., Kura Oncology and Adagene go up and down completely randomly.
Pair Corralation between Kura Oncology and Adagene
Given the investment horizon of 90 days Kura Oncology is expected to under-perform the Adagene. In addition to that, Kura Oncology is 1.6 times more volatile than Adagene. It trades about -0.18 of its total potential returns per unit of risk. Adagene is currently generating about -0.22 per unit of volatility. If you would invest 310.00 in Adagene on August 30, 2024 and sell it today you would lose (79.00) from holding Adagene or give up 25.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kura Oncology vs. Adagene
Performance |
| Timeline |
| Kura Oncology |
| Adagene |
Kura Oncology and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Oncology and Adagene
The main advantage of trading using opposite Kura Oncology and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Oncology position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| Kura Oncology vs. Protagonist Therapeutics | Kura Oncology vs. Merus BV | Kura Oncology vs. Replimune Group | Kura Oncology vs. Kalvista Pharmaceuticals |
| Adagene vs. Ikena Oncology | Adagene vs. Eliem Therapeutics | Adagene vs. HCW Biologics | Adagene vs. Tempest 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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