Correlation Between Quoin Pharmaceuticals and Kaspien Holdings

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

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

Diversification Opportunities for Quoin Pharmaceuticals and Kaspien Holdings

0.27

Correlation Coefficient

Quoin Pharmaceuticals  Kaspien Holdings

Modest diversification

The 3 months correlation between Quoin and Kaspien is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Quoin Pharmaceuticals Ltd and Kaspien Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaspien Holdings and Quoin Pharmaceuticals 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 Quoin Pharmaceuticals Ltd are associated (or correlated) with Kaspien Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaspien Holdings has no effect on the direction of Quoin Pharmaceuticals i.e., Quoin Pharmaceuticals and Kaspien Holdings go up and down completely randomly.

Pair Corralation between Quoin Pharmaceuticals and Kaspien Holdings

Given the investment horizon of 90 days Quoin Pharmaceuticals Ltd is expected to generate 0.73 times more return on investment than Kaspien Holdings. However, Quoin Pharmaceuticals Ltd is 1.38 times less risky than Kaspien Holdings. It trades about -0.05 of its potential returns per unit of risk. Kaspien Holdings is currently generating about -0.06 per unit of risk. If you would invest  1,860  in Quoin Pharmaceuticals Ltd on October 10, 2024 and sell it today you would lose (1,794) from holding Quoin Pharmaceuticals Ltd or give up 96.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	21.17%
Values	Daily Returns

Quoin Pharmaceuticals Ltd  vs.  Kaspien Holdings

Quoin Pharmaceuticals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quoin Pharmaceuticals Ltd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Quoin Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Kaspien Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaspien Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Kaspien Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Quoin Pharmaceuticals and Kaspien Holdings

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

The idea behind Quoin Pharmaceuticals Ltd and Kaspien Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.