Correlation Between KonaTel and Mink Therapeutics

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Can any of the company-specific risk be diversified away by investing in both KonaTel and Mink 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 KonaTel and Mink Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KonaTel and Mink Therapeutics, you can compare the effects of market volatilities on KonaTel and Mink 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 KonaTel with a short position of Mink Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KonaTel and Mink Therapeutics.

Diversification Opportunities for KonaTel and Mink Therapeutics

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between KonaTel and Mink is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding KonaTel and Mink Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mink Therapeutics and KonaTel 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 KonaTel are associated (or correlated) with Mink Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mink Therapeutics has no effect on the direction of KonaTel i.e., KonaTel and Mink Therapeutics go up and down completely randomly.

Pair Corralation between KonaTel and Mink Therapeutics

Given the investment horizon of 90 days KonaTel is expected to under-perform the Mink Therapeutics. In addition to that, KonaTel is 2.6 times more volatile than Mink Therapeutics. It trades about -0.05 of its total potential returns per unit of risk. Mink Therapeutics is currently generating about -0.1 per unit of volatility. If you would invest  75.00  in Mink Therapeutics on September 29, 2024 and sell it today you would lose (18.00) from holding Mink Therapeutics or give up 24.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.44%
ValuesDaily Returns

KonaTel  vs.  Mink Therapeutics

 Performance 
       Timeline  
KonaTel 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days KonaTel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Mink Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mink Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

KonaTel and Mink Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KonaTel and Mink Therapeutics

The main advantage of trading using opposite KonaTel and Mink Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KonaTel position performs unexpectedly, Mink 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 Mink Therapeutics will offset losses from the drop in Mink Therapeutics' long position.
The idea behind KonaTel and Mink 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.
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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