Correlation Between Level Biotechnology and Kinsus Interconnect

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

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

Diversification Opportunities for Level Biotechnology and Kinsus Interconnect

0.02

Correlation Coefficient

Level Biotechnology  Kinsus Interconnect

Significant diversification

The 3 months correlation between Level and Kinsus is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Level Biotechnology and Kinsus Interconnect Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsus Interconnect and Level Biotechnology 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 Level Biotechnology are associated (or correlated) with Kinsus Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsus Interconnect has no effect on the direction of Level Biotechnology i.e., Level Biotechnology and Kinsus Interconnect go up and down completely randomly.

Pair Corralation between Level Biotechnology and Kinsus Interconnect

Assuming the 90 days trading horizon Level Biotechnology is expected to generate 0.27 times more return on investment than Kinsus Interconnect. However, Level Biotechnology is 3.73 times less risky than Kinsus Interconnect. It trades about 0.16 of its potential returns per unit of risk. Kinsus Interconnect Technology is currently generating about -0.02 per unit of risk. If you would invest  3,170  in Level Biotechnology on December 23, 2024 and sell it today you would earn a total of  190.00  from holding Level Biotechnology or generate 5.99% return on investment over 90 days.

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

Level Biotechnology  vs.  Kinsus Interconnect Technology

Level Biotechnology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Level Biotechnology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Level Biotechnology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kinsus Interconnect

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinsus Interconnect Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Kinsus Interconnect is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Level Biotechnology and Kinsus Interconnect

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

The idea behind Level Biotechnology and Kinsus Interconnect Technology 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 Global Correlations module to find global opportunities by holding instruments from different markets.