Correlation Between Roivant Sciences and Kane Biotech

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

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

Diversification Opportunities for Roivant Sciences and Kane Biotech

0.0

Correlation Coefficient

Roivant Sciences  Kane Biotech

Pay attention - limited upside

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

Pair Corralation between Roivant Sciences and Kane Biotech

If you would invest  6.74  in Kane Biotech on December 26, 2024 and sell it today you would earn a total of  0.46  from holding Kane Biotech or generate 6.82% return on investment over 90 days.

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

Roivant Sciences  vs.  Kane Biotech

Roivant Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roivant Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Roivant Sciences is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Kane Biotech

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kane Biotech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward indicators, Kane Biotech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Roivant Sciences and Kane Biotech

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

The idea behind Roivant Sciences and Kane Biotech 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.