Correlation Between K Way and Excelsior Biopharma

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

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

Diversification Opportunities for K Way and Excelsior Biopharma

0.21

Correlation Coefficient

K Way  Excelsior Biopharma

Modest diversification

The 3 months correlation between 5201 and Excelsior is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding K Way Information and Excelsior Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Biopharma and K Way 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 K Way Information are associated (or correlated) with Excelsior Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Biopharma has no effect on the direction of K Way i.e., K Way and Excelsior Biopharma go up and down completely randomly.

Pair Corralation between K Way and Excelsior Biopharma

Assuming the 90 days trading horizon K Way Information is expected to under-perform the Excelsior Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, K Way Information is 1.21 times less risky than Excelsior Biopharma. The stock trades about -0.11 of its potential returns per unit of risk. The Excelsior Biopharma is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  2,995  in Excelsior Biopharma on October 12, 2024 and sell it today you would earn a total of  390.00  from holding Excelsior Biopharma or generate 13.02% return on investment over 90 days.

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

K Way Information  vs.  Excelsior Biopharma

K Way Information

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in K Way Information are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, K Way is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Excelsior Biopharma

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Excelsior Biopharma are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Excelsior Biopharma showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with K Way and Excelsior Biopharma

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

The idea behind K Way Information and Excelsior Biopharma 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 Stocks Directory module to find actively traded stocks across global markets.