Correlation Between Enliven Therapeutics and Kiora Pharmaceuticals

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

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

Diversification Opportunities for Enliven Therapeutics and Kiora Pharmaceuticals

0.39

Correlation Coefficient

Enliven Therapeutics  Kiora Pharmaceuticals

Weak diversification

The 3 months correlation between Enliven and Kiora is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Enliven Therapeutics and Kiora Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiora Pharmaceuticals and Enliven Therapeutics 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 Enliven Therapeutics are associated (or correlated) with Kiora Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiora Pharmaceuticals has no effect on the direction of Enliven Therapeutics i.e., Enliven Therapeutics and Kiora Pharmaceuticals go up and down completely randomly.

Pair Corralation between Enliven Therapeutics and Kiora Pharmaceuticals

Given the investment horizon of 90 days Enliven Therapeutics is expected to under-perform the Kiora Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Enliven Therapeutics is 1.19 times less risky than Kiora Pharmaceuticals. The stock trades about -0.01 of its potential returns per unit of risk. The Kiora Pharmaceuticals is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  330.00  in Kiora Pharmaceuticals on December 28, 2024 and sell it today you would lose (22.00) from holding Kiora Pharmaceuticals or give up 6.67% of portfolio value over 90 days.

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

Enliven Therapeutics  vs.  Kiora Pharmaceuticals

Enliven Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enliven Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Enliven Therapeutics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Kiora Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kiora Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kiora Pharmaceuticals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Enliven Therapeutics and Kiora Pharmaceuticals

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

The idea behind Enliven Therapeutics and Kiora Pharmaceuticals 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.