Correlation Between ProKidney Corp and CSL

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

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

Diversification Opportunities for ProKidney Corp and CSL

0.31

Correlation Coefficient

ProKidney Corp  CSL

Weak diversification

The 3 months correlation between ProKidney and CSL is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ProKidney Corp and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and ProKidney Corp 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 ProKidney Corp are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of ProKidney Corp i.e., ProKidney Corp and CSL go up and down completely randomly.

Pair Corralation between ProKidney Corp and CSL

Given the investment horizon of 90 days ProKidney Corp is expected to generate 4.27 times more return on investment than CSL. However, ProKidney Corp is 4.27 times more volatile than CSL. It trades about -0.03 of its potential returns per unit of risk. CSL is currently generating about -0.16 per unit of risk. If you would invest  180.00  in ProKidney Corp on October 27, 2024 and sell it today you would lose (8.00) from holding ProKidney Corp or give up 4.44% of portfolio value over 90 days.

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

ProKidney Corp  vs.  CSL

ProKidney Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProKidney Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, ProKidney Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CSL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ProKidney Corp and CSL

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

The idea behind ProKidney Corp and CSL 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.