Correlation Between Cadus and Kindred Biosciences
Can any of the company-specific risk be diversified away by investing in both Cadus and Kindred Biosciences 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 Cadus and Kindred Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadus and Kindred Biosciences, you can compare the effects of market volatilities on Cadus and Kindred Biosciences 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 Cadus with a short position of Kindred Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadus and Kindred Biosciences.
Diversification Opportunities for Cadus and Kindred Biosciences
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cadus and Kindred is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cadus and Kindred Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kindred Biosciences and Cadus 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 Cadus are associated (or correlated) with Kindred Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kindred Biosciences has no effect on the direction of Cadus i.e., Cadus and Kindred Biosciences go up and down completely randomly.
Pair Corralation between Cadus and Kindred Biosciences
If you would invest (100.00) in Kindred Biosciences on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Kindred Biosciences or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cadus vs. Kindred Biosciences
Performance |
| Timeline |
| Cadus |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kindred Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cadus and Kindred Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadus and Kindred Biosciences
The main advantage of trading using opposite Cadus and Kindred Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadus position performs unexpectedly, Kindred Biosciences 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 Kindred Biosciences will offset losses from the drop in Kindred Biosciences' long position.The idea behind Cadus and Kindred Biosciences 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.| Kindred Biosciences vs. Emerson Radio | Kindred Biosciences vs. Fresh Grapes LLC | Kindred Biosciences vs. National Beverage Corp | Kindred Biosciences vs. Boston Beer |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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