Correlation Between Kane Biotech and Neutra Corp

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

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

Diversification Opportunities for Kane Biotech and Neutra Corp

0.45

Correlation Coefficient

Kane Biotech  Neutra Corp

Very weak diversification

The 3 months correlation between Kane and Neutra is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kane Biotech and Neutra Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neutra Corp and Kane Biotech 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 Kane Biotech are associated (or correlated) with Neutra Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neutra Corp has no effect on the direction of Kane Biotech i.e., Kane Biotech and Neutra Corp go up and down completely randomly.

Pair Corralation between Kane Biotech and Neutra Corp

If you would invest  0.01  in Neutra Corp on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Neutra Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Kane Biotech  vs.  Neutra Corp

Kane Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kane Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward 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.

Neutra Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Neutra Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Neutra Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kane Biotech and Neutra Corp

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

The idea behind Kane Biotech and Neutra Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.