Correlation Between Kineta and GH Research

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

By analyzing existing cross correlation between Kineta Inc and GH Research PLC, you can compare the effects of market volatilities on Kineta and GH Research 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 GH Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kineta and GH Research.

Diversification Opportunities for Kineta and GH Research

0.03

Correlation Coefficient

Kineta  GH Research

Significant diversification

The 3 months correlation between Kineta and GHRS is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kineta Inc and GH Research PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GH Research PLC 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 GH Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GH Research PLC has no effect on the direction of Kineta i.e., Kineta and GH Research go up and down completely randomly.

Pair Corralation between Kineta and GH Research

Allowing for the 90-day total investment horizon Kineta Inc is expected to under-perform the GH Research. In addition to that, Kineta is 2.09 times more volatile than GH Research PLC. It trades about -0.04 of its total potential returns per unit of risk. GH Research PLC is currently generating about 0.05 per unit of volatility. If you would invest  583.00  in GH Research PLC on October 5, 2024 and sell it today you would earn a total of  201.00  from holding GH Research PLC or generate 34.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	89.55%
Values	Daily Returns

Kineta Inc  vs.  GH Research PLC

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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

GH Research PLC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GH Research PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, GH Research unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kineta and GH Research

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

The idea behind Kineta Inc and GH Research PLC 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.