Correlation Between Kura Oncology and Evotec SE
Can any of the company-specific risk be diversified away by investing in both Kura Oncology and Evotec SE 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 Evotec SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kura Oncology and Evotec SE ADR, you can compare the effects of market volatilities on Kura Oncology and Evotec SE 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 Evotec SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Oncology and Evotec SE.
Diversification Opportunities for Kura Oncology and Evotec SE
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kura and Evotec is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kura Oncology and Evotec SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evotec SE ADR 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 Evotec SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evotec SE ADR has no effect on the direction of Kura Oncology i.e., Kura Oncology and Evotec SE go up and down completely randomly.
Pair Corralation between Kura Oncology and Evotec SE
Given the investment horizon of 90 days Kura Oncology is expected to under-perform the Evotec SE. In addition to that, Kura Oncology is 1.09 times more volatile than Evotec SE ADR. It trades about -0.23 of its total potential returns per unit of risk. Evotec SE ADR is currently generating about 0.28 per unit of volatility. If you would invest 355.00 in Evotec SE ADR on August 24, 2024 and sell it today you would earn a total of 180.00 from holding Evotec SE ADR or generate 50.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kura Oncology vs. Evotec SE ADR
Performance |
| Timeline |
| Kura Oncology |
| Evotec SE ADR |
Kura Oncology and Evotec SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Oncology and Evotec SE
The main advantage of trading using opposite Kura Oncology and Evotec SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Oncology position performs unexpectedly, Evotec SE 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 Evotec SE will offset losses from the drop in Evotec SE's long position.| Kura Oncology vs. Protagonist Therapeutics | Kura Oncology vs. Merus BV | Kura Oncology vs. Replimune Group | Kura Oncology vs. Kalvista Pharmaceuticals |
| Evotec SE vs. Prestige Brand Holdings | Evotec SE vs. Supernus Pharmaceuticals | Evotec SE vs. Collegium Pharmaceutical | Evotec SE vs. ANI Pharmaceuticals |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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