Correlation Between Cardio Diagnostics and Kymera Therapeutics

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

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

Diversification Opportunities for Cardio Diagnostics and Kymera Therapeutics

-0.53

Correlation Coefficient

Cardio Diagnostics  Kymera Therapeutics

Excellent diversification

The 3 months correlation between Cardio and Kymera is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cardio Diagnostics Holdings and Kymera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kymera Therapeutics and Cardio Diagnostics 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 Cardio Diagnostics Holdings are associated (or correlated) with Kymera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kymera Therapeutics has no effect on the direction of Cardio Diagnostics i.e., Cardio Diagnostics and Kymera Therapeutics go up and down completely randomly.

Pair Corralation between Cardio Diagnostics and Kymera Therapeutics

Assuming the 90 days horizon Cardio Diagnostics Holdings is expected to generate 24.12 times more return on investment than Kymera Therapeutics. However, Cardio Diagnostics is 24.12 times more volatile than Kymera Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Kymera Therapeutics is currently generating about 0.09 per unit of risk. If you would invest  17.00  in Cardio Diagnostics Holdings on September 23, 2024 and sell it today you would lose (7.21) from holding Cardio Diagnostics Holdings or give up 42.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	86.67%
Values	Daily Returns

Cardio Diagnostics Holdings  vs.  Kymera Therapeutics

Cardio Diagnostics

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardio Diagnostics Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Cardio Diagnostics showed solid returns over the last few months and may actually be approaching a breakup point.

Kymera Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kymera Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Cardio Diagnostics and Kymera Therapeutics

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

The idea behind Cardio Diagnostics Holdings and Kymera Therapeutics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.