Correlation Between Field Trip and Kane Biotech

Can any of the company-specific risk be diversified away by investing in both Field Trip 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 Field Trip and Kane Biotech 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 Kane Biotech, you can compare the effects of market volatilities on Field Trip 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 Field Trip with a short position of Kane Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Field Trip and Kane Biotech.

Diversification Opportunities for Field Trip and Kane Biotech

0.06

Correlation Coefficient

Field Trip  Kane Biotech

Significant diversification

The 3 months correlation between Field and Kane is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Field Trip Health and Kane Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kane Biotech 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 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 Field Trip i.e., Field Trip and Kane Biotech go up and down completely randomly.

Pair Corralation between Field Trip and Kane Biotech

If you would invest  4.12  in Field Trip Health on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Field Trip Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Field Trip Health  vs.  Kane Biotech

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.

Kane Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kane Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Field Trip and Kane Biotech

The main advantage of trading using opposite Field Trip and Kane Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Field Trip 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 Field Trip Health 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.