Correlation Between Seer and Kodiak Sciences

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

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

Diversification Opportunities for Seer and Kodiak Sciences

0.6

Correlation Coefficient

Seer  Kodiak Sciences

Poor diversification

The 3 months correlation between Seer and Kodiak is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Seer Inc and Kodiak Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Sciences and Seer 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 Seer Inc are associated (or correlated) with Kodiak Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Sciences has no effect on the direction of Seer i.e., Seer and Kodiak Sciences go up and down completely randomly.

Pair Corralation between Seer and Kodiak Sciences

Given the investment horizon of 90 days Seer is expected to generate 3.88 times less return on investment than Kodiak Sciences. But when comparing it to its historical volatility, Seer Inc is 2.34 times less risky than Kodiak Sciences. It trades about 0.17 of its potential returns per unit of risk. Kodiak Sciences is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  438.00  in Kodiak Sciences on October 6, 2024 and sell it today you would earn a total of  474.00  from holding Kodiak Sciences or generate 108.22% return on investment over 90 days.

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

Seer Inc  vs.  Kodiak Sciences

Seer Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seer Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Seer reported solid returns over the last few months and may actually be approaching a breakup point.

Kodiak Sciences

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kodiak Sciences are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Kodiak Sciences exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seer and Kodiak Sciences

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

The idea behind Seer Inc and Kodiak Sciences 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.