Correlation Between Eyenovia and Kodiak Sciences

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

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

Diversification Opportunities for Eyenovia and Kodiak Sciences

0.9

Correlation Coefficient

Eyenovia  Kodiak Sciences

Almost no diversification

The 3 months correlation between Eyenovia and Kodiak is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Eyenovia and Kodiak Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Sciences and Eyenovia 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 Eyenovia are associated (or correlated) with Kodiak Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Sciences has no effect on the direction of Eyenovia i.e., Eyenovia and Kodiak Sciences go up and down completely randomly.

Pair Corralation between Eyenovia and Kodiak Sciences

Given the investment horizon of 90 days Eyenovia is expected to under-perform the Kodiak Sciences. In addition to that, Eyenovia is 1.76 times more volatile than Kodiak Sciences. It trades about -0.28 of its total potential returns per unit of risk. Kodiak Sciences is currently generating about -0.31 per unit of volatility. If you would invest  997.00  in Kodiak Sciences on December 29, 2024 and sell it today you would lose (691.00) from holding Kodiak Sciences or give up 69.31% of portfolio value over 90 days.

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

Eyenovia  vs.  Kodiak Sciences

Eyenovia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eyenovia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Kodiak Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kodiak Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Eyenovia and Kodiak Sciences

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

The idea behind Eyenovia and Kodiak Sciences 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..