Correlation Between NYSE Composite and Khiron Life
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Khiron 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 NYSE Composite and Khiron Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Khiron Life Sciences, you can compare the effects of market volatilities on NYSE Composite and Khiron 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 NYSE Composite with a short position of Khiron Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Khiron Life.
Diversification Opportunities for NYSE Composite and Khiron Life
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Khiron is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences and NYSE Composite 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 NYSE Composite are associated (or correlated) with Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of NYSE Composite i.e., NYSE Composite and Khiron Life go up and down completely randomly.
Pair Corralation between NYSE Composite and Khiron Life
Assuming the 90 days trading horizon NYSE Composite is expected to generate 79.12 times less return on investment than Khiron Life. But when comparing it to its historical volatility, NYSE Composite is 136.87 times less risky than Khiron Life. It trades about 0.14 of its potential returns per unit of risk. Khiron Life Sciences is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.10 in Khiron Life Sciences on August 25, 2024 and sell it today you would lose (1.09) from holding Khiron Life Sciences or give up 99.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Khiron Life Sciences
Performance |
| Timeline |
NYSE Composite and Khiron Life Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Khiron Life Sciences
Pair trading matchups for Khiron Life
Pair Trading with NYSE Composite and Khiron Life
The main advantage of trading using opposite NYSE Composite and Khiron Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Khiron 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 Khiron Life will offset losses from the drop in Khiron Life's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Khiron Life vs. Blueberries Medical Corp | Khiron Life vs. Speakeasy Cannabis Club | Khiron Life vs. City View Green | Khiron Life vs. Benchmark Botanics |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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