Correlation Between Ocugen and Kronos Bio

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

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

Diversification Opportunities for Ocugen and Kronos Bio

0.38

Correlation Coefficient

Ocugen  Kronos Bio

Weak diversification

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

Pair Corralation between Ocugen and Kronos Bio

Given the investment horizon of 90 days Ocugen Inc is expected to generate 2.09 times more return on investment than Kronos Bio. However, Ocugen is 2.09 times more volatile than Kronos Bio. It trades about -0.03 of its potential returns per unit of risk. Kronos Bio is currently generating about -0.08 per unit of risk. If you would invest  85.00  in Ocugen Inc on December 27, 2024 and sell it today you would lose (13.00) from holding Ocugen Inc or give up 15.29% of portfolio value over 90 days.

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

Ocugen Inc  vs.  Kronos Bio

Ocugen Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ocugen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Kronos Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kronos Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Ocugen and Kronos Bio

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

The idea behind Ocugen Inc and Kronos Bio 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..