Correlation Between Field Trip and Kineta

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

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

Diversification Opportunities for Field Trip and Kineta

0.1

Correlation Coefficient

Field Trip  Kineta

Average diversification

The 3 months correlation between Field and Kineta is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Field Trip Health and Kineta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kineta Inc and Field Trip 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 Field Trip Health are associated (or correlated) with Kineta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kineta Inc has no effect on the direction of Field Trip i.e., Field Trip and Kineta go up and down completely randomly.

Pair Corralation between Field Trip and Kineta

Assuming the 90 days horizon Field Trip Health is expected to generate 1.01 times more return on investment than Kineta. However, Field Trip is 1.01 times more volatile than Kineta Inc. It trades about 0.01 of its potential returns per unit of risk. Kineta Inc is currently generating about -0.02 per unit of risk. If you would invest  5.50  in Field Trip Health on September 23, 2024 and sell it today you would lose (1.38) from holding Field Trip Health or give up 25.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	23.74%
Values	Daily Returns

Field Trip Health  vs.  Kineta Inc

Field Trip Health

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kineta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kineta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Field Trip and Kineta

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

The idea behind Field Trip Health and Kineta Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.