Correlation Between Kronos Bio and Nutriband

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

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

Diversification Opportunities for Kronos Bio and Nutriband

0.43

Correlation Coefficient

Kronos Bio  Nutriband

Very weak diversification

The 3 months correlation between Kronos and Nutriband is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Bio and Nutriband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutriband and Kronos Bio 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 Kronos Bio are associated (or correlated) with Nutriband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutriband has no effect on the direction of Kronos Bio i.e., Kronos Bio and Nutriband go up and down completely randomly.

Pair Corralation between Kronos Bio and Nutriband

Given the investment horizon of 90 days Kronos Bio is expected to generate 23.37 times less return on investment than Nutriband. But when comparing it to its historical volatility, Kronos Bio is 3.74 times less risky than Nutriband. It trades about 0.02 of its potential returns per unit of risk. Nutriband is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  455.00  in Nutriband on December 1, 2024 and sell it today you would earn a total of  272.00  from holding Nutriband or generate 59.78% return on investment over 90 days.

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

Kronos Bio  vs.  Nutriband

Kronos Bio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kronos Bio are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Kronos Bio is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Nutriband

Risk-Adjusted Performance

OK

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

Pair Trading with Kronos Bio and Nutriband

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

The idea behind Kronos Bio and Nutriband 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.