Correlation Between Kodiak Sciences and Serina Therapeutics

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

By analyzing existing cross correlation between Kodiak Sciences and Serina Therapeutics, you can compare the effects of market volatilities on Kodiak Sciences and Serina Therapeutics 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 Serina Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kodiak Sciences and Serina Therapeutics.

Diversification Opportunities for Kodiak Sciences and Serina Therapeutics

0.5

Correlation Coefficient

Kodiak Sciences  Serina Therapeutics

Very weak diversification

The 3 months correlation between Kodiak and Serina is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Sciences and Serina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serina Therapeutics 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 Serina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serina Therapeutics has no effect on the direction of Kodiak Sciences i.e., Kodiak Sciences and Serina Therapeutics go up and down completely randomly.

Pair Corralation between Kodiak Sciences and Serina Therapeutics

Considering the 90-day investment horizon Kodiak Sciences is expected to under-perform the Serina Therapeutics. In addition to that, Kodiak Sciences is 1.63 times more volatile than Serina Therapeutics. It trades about -0.24 of its total potential returns per unit of risk. Serina Therapeutics is currently generating about -0.11 per unit of volatility. If you would invest  600.00  in Serina Therapeutics on December 20, 2024 and sell it today you would lose (146.00) from holding Serina Therapeutics or give up 24.33% of portfolio value over 90 days.

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

Kodiak Sciences  vs.  Serina Therapeutics

Kodiak Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kodiak Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Serina Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Serina Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Kodiak Sciences and Serina Therapeutics

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

The idea behind Kodiak Sciences and Serina Therapeutics 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.