Correlation Between Awakn Life and Kane Biotech

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

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

Diversification Opportunities for Awakn Life and Kane Biotech

0.0

Correlation Coefficient

Awakn Life  Kane Biotech

Pay attention - limited upside

The 3 months correlation between Awakn and Kane is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Awakn Life Sciences and Kane Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kane Biotech and Awakn Life 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 Awakn Life Sciences are associated (or correlated) with Kane Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kane Biotech has no effect on the direction of Awakn Life i.e., Awakn Life and Kane Biotech go up and down completely randomly.

Pair Corralation between Awakn Life and Kane Biotech

If you would invest  6.74  in Kane Biotech on December 25, 2024 and sell it today you would earn a total of  0.06  from holding Kane Biotech or generate 0.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Awakn Life Sciences  vs.  Kane Biotech

Awakn Life Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Awakn Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Awakn Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Kane Biotech

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kane Biotech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Kane Biotech is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Awakn Life and Kane Biotech

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

The idea behind Awakn Life Sciences and Kane Biotech 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.