Correlation Between Kaleido Biosciences and ChitogenX

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

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

Diversification Opportunities for Kaleido Biosciences and ChitogenX

0.55

Correlation Coefficient

Kaleido Biosciences  ChitogenX

Very weak diversification

The 3 months correlation between Kaleido and ChitogenX is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kaleido Biosciences and ChitogenX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChitogenX and Kaleido Biosciences 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 Kaleido Biosciences are associated (or correlated) with ChitogenX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChitogenX has no effect on the direction of Kaleido Biosciences i.e., Kaleido Biosciences and ChitogenX go up and down completely randomly.

Pair Corralation between Kaleido Biosciences and ChitogenX

If you would invest  1.00  in Kaleido Biosciences on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Kaleido Biosciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Kaleido Biosciences  vs.  ChitogenX

Kaleido Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaleido Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Kaleido Biosciences is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ChitogenX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChitogenX 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kaleido Biosciences and ChitogenX

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

The idea behind Kaleido Biosciences and ChitogenX 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 Stocks Directory module to find actively traded stocks across global markets.