Correlation Between Xbrane Biopharma and Klaria Pharma

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

By analyzing existing cross correlation between Xbrane Biopharma AB and Klaria Pharma Holding, you can compare the effects of market volatilities on Xbrane Biopharma and Klaria Pharma 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 Xbrane Biopharma with a short position of Klaria Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xbrane Biopharma and Klaria Pharma.

Diversification Opportunities for Xbrane Biopharma and Klaria Pharma

0.56

Correlation Coefficient

Xbrane Biopharma  Klaria Pharma

Very weak diversification

The 3 months correlation between Xbrane and Klaria is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xbrane Biopharma AB and Klaria Pharma Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klaria Pharma Holding and Xbrane 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 Xbrane Biopharma AB are associated (or correlated) with Klaria Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klaria Pharma Holding has no effect on the direction of Xbrane Biopharma i.e., Xbrane Biopharma and Klaria Pharma go up and down completely randomly.

Pair Corralation between Xbrane Biopharma and Klaria Pharma

Assuming the 90 days trading horizon Xbrane Biopharma AB is expected to under-perform the Klaria Pharma. In addition to that, Xbrane Biopharma is 1.56 times more volatile than Klaria Pharma Holding. It trades about -0.02 of its total potential returns per unit of risk. Klaria Pharma Holding is currently generating about 0.01 per unit of volatility. If you would invest  100.00  in Klaria Pharma Holding on October 11, 2024 and sell it today you would lose (70.00) from holding Klaria Pharma Holding or give up 70.0% of portfolio value over 90 days.

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

Xbrane Biopharma AB  vs.  Klaria Pharma Holding

Xbrane Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

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

Klaria Pharma Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Klaria Pharma Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Xbrane Biopharma and Klaria Pharma

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

The idea behind Xbrane Biopharma AB and Klaria Pharma Holding 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.