Correlation Between Kiniksa Pharmaceuticals and Rimini Street

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

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

Diversification Opportunities for Kiniksa Pharmaceuticals and Rimini Street

0.77

Correlation Coefficient

Kiniksa Pharmaceuticals  Rimini Street

Poor diversification

The 3 months correlation between Kiniksa and Rimini is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kiniksa Pharmaceuticals and Rimini Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimini Street and Kiniksa Pharmaceuticals 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 Kiniksa Pharmaceuticals are associated (or correlated) with Rimini Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimini Street has no effect on the direction of Kiniksa Pharmaceuticals i.e., Kiniksa Pharmaceuticals and Rimini Street go up and down completely randomly.

Pair Corralation between Kiniksa Pharmaceuticals and Rimini Street

Given the investment horizon of 90 days Kiniksa Pharmaceuticals is expected to generate 2.0 times less return on investment than Rimini Street. But when comparing it to its historical volatility, Kiniksa Pharmaceuticals is 1.81 times less risky than Rimini Street. It trades about 0.12 of its potential returns per unit of risk. Rimini Street is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  265.00  in Rimini Street on December 29, 2024 and sell it today you would earn a total of  95.00  from holding Rimini Street or generate 35.85% return on investment over 90 days.

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

Kiniksa Pharmaceuticals  vs.  Rimini Street

Kiniksa Pharmaceuticals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kiniksa Pharmaceuticals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Kiniksa Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.

Rimini Street

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rimini Street are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Rimini Street demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kiniksa Pharmaceuticals and Rimini Street

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

The idea behind Kiniksa Pharmaceuticals and Rimini Street 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..