Correlation Between Khiron Life and Millennium Investment

Can any of the company-specific risk be diversified away by investing in both Khiron Life and Millennium Investment 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 Millennium Investment 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 Millennium Investment Acquisition, you can compare the effects of market volatilities on Khiron Life and Millennium Investment 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 Millennium Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khiron Life and Millennium Investment.

Diversification Opportunities for Khiron Life and Millennium Investment

0.17

Correlation Coefficient

Khiron Life  Millennium Investment

Average diversification

The 3 months correlation between Khiron and Millennium is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences and Millennium Investment Acquisit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Investment 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 Millennium Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Investment has no effect on the direction of Khiron Life i.e., Khiron Life and Millennium Investment go up and down completely randomly.

Pair Corralation between Khiron Life and Millennium Investment

Assuming the 90 days horizon Khiron Life Sciences is expected to generate 4.05 times more return on investment than Millennium Investment. However, Khiron Life is 4.05 times more volatile than Millennium Investment Acquisition. It trades about 0.07 of its potential returns per unit of risk. Millennium Investment Acquisition is currently generating about 0.08 per unit of risk. If you would invest  0.90  in Khiron Life Sciences on December 2, 2024 and sell it today you would lose (0.90) from holding Khiron Life Sciences or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.4%
Values	Daily Returns

Khiron Life Sciences  vs.  Millennium Investment Acquisit

Khiron Life Sciences

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Millennium Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Millennium Investment Acquisition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Millennium Investment exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Khiron Life and Millennium Investment

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

The idea behind Khiron Life Sciences and Millennium Investment Acquisition 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.