Correlation Between Regen BioPharma and KYN Capital

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

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

Diversification Opportunities for Regen BioPharma and KYN Capital

0.09

Correlation Coefficient

Regen BioPharma  KYN Capital

Significant diversification

The 3 months correlation between Regen and KYN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Regen BioPharma and KYN Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYN Capital Group and Regen BioPharma 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 Regen BioPharma are associated (or correlated) with KYN Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYN Capital Group has no effect on the direction of Regen BioPharma i.e., Regen BioPharma and KYN Capital go up and down completely randomly.

Pair Corralation between Regen BioPharma and KYN Capital

Given the investment horizon of 90 days Regen BioPharma is expected to generate 1.05 times less return on investment than KYN Capital. In addition to that, Regen BioPharma is 1.19 times more volatile than KYN Capital Group. It trades about 0.03 of its total potential returns per unit of risk. KYN Capital Group is currently generating about 0.04 per unit of volatility. If you would invest  0.07  in KYN Capital Group on December 26, 2024 and sell it today you would lose (0.02) from holding KYN Capital Group or give up 28.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Regen BioPharma  vs.  KYN Capital Group

Regen BioPharma

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regen BioPharma are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental drivers, Regen BioPharma reported solid returns over the last few months and may actually be approaching a breakup point.

KYN Capital Group

Risk-Adjusted Performance

Insignificant

Over the last 90 days KYN Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak basic indicators, KYN Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regen BioPharma and KYN Capital

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

The idea behind Regen BioPharma and KYN Capital Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .