Correlation Between Khiron Life and Hypera SA

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

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

Diversification Opportunities for Khiron Life and Hypera SA

-0.35

Correlation Coefficient

Khiron Life  Hypera SA

Very good diversification

The 3 months correlation between Khiron and Hypera is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences and Hypera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypera SA and Khiron Life 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 Khiron Life Sciences are associated (or correlated) with Hypera SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypera SA has no effect on the direction of Khiron Life i.e., Khiron Life and Hypera SA go up and down completely randomly.

Pair Corralation between Khiron Life and Hypera SA

Assuming the 90 days horizon Khiron Life Sciences is expected to generate 28.16 times more return on investment than Hypera SA. However, Khiron Life is 28.16 times more volatile than Hypera SA. It trades about 0.05 of its potential returns per unit of risk. Hypera SA is currently generating about -0.07 per unit of risk. If you would invest  11.00  in Khiron Life Sciences on October 21, 2024 and sell it today you would lose (10.99) from holding Khiron Life Sciences or give up 99.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Khiron Life Sciences  vs.  Hypera SA

Khiron Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hypera SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hypera SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain fairly 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.

Pair Trading with Khiron Life and Hypera SA

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

The idea behind Khiron Life Sciences and Hypera SA 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.