Correlation Between KTRA Old and DiaMedica Therapeutics

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

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

Diversification Opportunities for KTRA Old and DiaMedica Therapeutics

0.0

Correlation Coefficient

KTRA Old  DiaMedica Therapeutics

Pay attention - limited upside

The 3 months correlation between KTRA and DiaMedica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KTRA Old and DiaMedica Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiaMedica Therapeutics and KTRA Old 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 KTRA Old are associated (or correlated) with DiaMedica Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiaMedica Therapeutics has no effect on the direction of KTRA Old i.e., KTRA Old and DiaMedica Therapeutics go up and down completely randomly.

Pair Corralation between KTRA Old and DiaMedica Therapeutics

If you would invest (100.00) in KTRA Old on December 20, 2024 and sell it today you would earn a total of  100.00  from holding KTRA Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

KTRA Old  vs.  DiaMedica Therapeutics

KTRA Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days KTRA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KTRA Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

DiaMedica Therapeutics

Risk-Adjusted Performance

Insignificant

Over the last 90 days DiaMedica Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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.

Pair Trading with KTRA Old and DiaMedica Therapeutics

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

The idea behind KTRA Old and DiaMedica 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.