Correlation Between Kineta and ATAI Life

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Can any of the company-specific risk be diversified away by investing in both Kineta and ATAI Life 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 Kineta and ATAI Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kineta Inc and ATAI Life Sciences, you can compare the effects of market volatilities on Kineta and ATAI Life 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 Kineta with a short position of ATAI Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kineta and ATAI Life.

Diversification Opportunities for Kineta and ATAI Life

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Kineta and ATAI is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kineta Inc and ATAI Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATAI Life Sciences and Kineta 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 Kineta Inc are associated (or correlated) with ATAI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATAI Life Sciences has no effect on the direction of Kineta i.e., Kineta and ATAI Life go up and down completely randomly.

Pair Corralation between Kineta and ATAI Life

Allowing for the 90-day total investment horizon Kineta Inc is expected to under-perform the ATAI Life. In addition to that, Kineta is 1.57 times more volatile than ATAI Life Sciences. It trades about -0.02 of its total potential returns per unit of risk. ATAI Life Sciences is currently generating about 0.0 per unit of volatility. If you would invest  265.00  in ATAI Life Sciences on September 23, 2024 and sell it today you would lose (146.00) from holding ATAI Life Sciences or give up 55.09% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.77%
ValuesDaily Returns

Kineta Inc  vs.  ATAI Life Sciences

 Performance 
       Timeline  
Kineta Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
ATAI Life Sciences 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ATAI Life Sciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, ATAI Life may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kineta and ATAI Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kineta and ATAI Life

The main advantage of trading using opposite Kineta and ATAI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kineta position performs unexpectedly, ATAI Life 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 ATAI Life will offset losses from the drop in ATAI Life's long position.
The idea behind Kineta Inc and ATAI Life 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.
Check out your portfolio center.
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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