Correlation Between Kineta and Biovie

Can any of the company-specific risk be diversified away by investing in both Kineta and Biovie 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 Kineta and Biovie into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kineta Inc and Biovie Inc, you can compare the effects of market volatilities on Kineta and Biovie 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 Kineta with a short position of Biovie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kineta and Biovie.

Diversification Opportunities for Kineta and Biovie

0.78

Correlation Coefficient

Kineta  Biovie

Poor diversification

The 3 months correlation between Kineta and Biovie is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kineta Inc and Biovie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biovie Inc and Kineta 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 Kineta Inc are associated (or correlated) with Biovie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biovie Inc has no effect on the direction of Kineta i.e., Kineta and Biovie go up and down completely randomly.

Pair Corralation between Kineta and Biovie

Allowing for the 90-day total investment horizon Kineta Inc is expected to under-perform the Biovie. But the stock apears to be less risky and, when comparing its historical volatility, Kineta Inc is 1.06 times less risky than Biovie. The stock trades about -0.01 of its potential returns per unit of risk. The Biovie Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  265.00  in Biovie Inc on January 31, 2024 and sell it today you would lose (215.00) from holding Biovie Inc or give up 81.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Kineta Inc  vs.  Biovie Inc

Kineta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kineta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Biovie Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biovie Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Kineta and Biovie

The main advantage of trading using opposite Kineta and Biovie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kineta position performs unexpectedly, Biovie 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 Biovie will offset losses from the drop in Biovie's long position.

The idea behind Kineta Inc and Biovie Inc 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.