Correlation Between Kodiak Sciences and Chocoladefabriken

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

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

Diversification Opportunities for Kodiak Sciences and Chocoladefabriken

-0.82

Correlation Coefficient

Kodiak Sciences  Chocoladefabriken

Pay attention - limited upside

The 3 months correlation between Kodiak and Chocoladefabriken is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Sciences and Chocoladefabriken Lindt Sprngl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Kodiak Sciences 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 Kodiak Sciences are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Kodiak Sciences i.e., Kodiak Sciences and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Kodiak Sciences and Chocoladefabriken

Considering the 90-day investment horizon Kodiak Sciences is expected to generate 2.36 times more return on investment than Chocoladefabriken. However, Kodiak Sciences is 2.36 times more volatile than Chocoladefabriken Lindt Sprngli. It trades about 0.05 of its potential returns per unit of risk. Chocoladefabriken Lindt Sprngli is currently generating about 0.04 per unit of risk. If you would invest  894.00  in Kodiak Sciences on October 12, 2024 and sell it today you would earn a total of  26.00  from holding Kodiak Sciences or generate 2.91% return on investment over 90 days.

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

Kodiak Sciences  vs.  Chocoladefabriken Lindt Sprngl

Kodiak Sciences

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kodiak Sciences are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Kodiak Sciences exhibited solid returns over the last few months and may actually be approaching a breakup point.

Chocoladefabriken Lindt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chocoladefabriken Lindt Sprngli has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kodiak Sciences and Chocoladefabriken

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

The idea behind Kodiak Sciences and Chocoladefabriken Lindt Sprngli 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.