Correlation Between Saratoga Investment and Kineta

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Can any of the company-specific risk be diversified away by investing in both Saratoga Investment and Kineta 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 Saratoga Investment and Kineta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saratoga Investment Corp and Kineta Inc, you can compare the effects of market volatilities on Saratoga Investment and Kineta 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 Saratoga Investment with a short position of Kineta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saratoga Investment and Kineta.

Diversification Opportunities for Saratoga Investment and Kineta

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Saratoga and Kineta is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Saratoga Investment Corp and Kineta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kineta Inc and Saratoga Investment 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 Saratoga Investment Corp are associated (or correlated) with Kineta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kineta Inc has no effect on the direction of Saratoga Investment i.e., Saratoga Investment and Kineta go up and down completely randomly.

Pair Corralation between Saratoga Investment and Kineta

Considering the 90-day investment horizon Saratoga Investment Corp is expected to generate 0.05 times more return on investment than Kineta. However, Saratoga Investment Corp is 18.46 times less risky than Kineta. It trades about 0.02 of its potential returns per unit of risk. Kineta Inc is currently generating about -0.01 per unit of risk. If you would invest  2,290  in Saratoga Investment Corp on January 22, 2024 and sell it today you would earn a total of  5.00  from holding Saratoga Investment Corp or generate 0.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Saratoga Investment Corp  vs.  Kineta Inc

 Performance 
       Timeline  
Saratoga Investment Corp 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Saratoga Investment Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Saratoga Investment is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
Kineta Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kineta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Saratoga Investment and Kineta Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Saratoga Investment and Kineta

The main advantage of trading using opposite Saratoga Investment and Kineta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saratoga Investment position performs unexpectedly, Kineta 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 Kineta will offset losses from the drop in Kineta's long position.
The idea behind Saratoga Investment Corp and Kineta 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.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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