Correlation Between Khiron Life and Sangui Biotech

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

Diversification Opportunities for Khiron Life and Sangui Biotech

0.33

Correlation Coefficient

Khiron Life  Sangui Biotech

Weak diversification

The 3 months correlation between Khiron and Sangui is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences and Sangui Biotech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangui Biotech Inter 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 Sangui Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangui Biotech Inter has no effect on the direction of Khiron Life i.e., Khiron Life and Sangui Biotech go up and down completely randomly.

Pair Corralation between Khiron Life and Sangui Biotech

Assuming the 90 days horizon Khiron Life Sciences is expected to under-perform the Sangui Biotech. In addition to that, Khiron Life is 1.19 times more volatile than Sangui Biotech International. It trades about -0.13 of its total potential returns per unit of risk. Sangui Biotech International is currently generating about -0.13 per unit of volatility. If you would invest  0.15  in Sangui Biotech International on December 4, 2024 and sell it today you would lose (0.13) from holding Sangui Biotech International or give up 86.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

Khiron Life Sciences  vs.  Sangui Biotech International

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.

Sangui Biotech Inter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sangui Biotech International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Khiron Life and Sangui Biotech

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

The idea behind Khiron Life Sciences and Sangui Biotech International 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.