Correlation Between Kala Pharmaceuticals and Axonics Modulation
Can any of the company-specific risk be diversified away by investing in both Kala Pharmaceuticals and Axonics Modulation 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 Kala Pharmaceuticals and Axonics Modulation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kala Pharmaceuticals and Axonics Modulation Technologies, you can compare the effects of market volatilities on Kala Pharmaceuticals and Axonics Modulation 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 Kala Pharmaceuticals with a short position of Axonics Modulation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kala Pharmaceuticals and Axonics Modulation.
Diversification Opportunities for Kala Pharmaceuticals and Axonics Modulation
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kala and Axonics is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kala Pharmaceuticals and Axonics Modulation Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axonics Modulation and Kala 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 Kala Pharmaceuticals are associated (or correlated) with Axonics Modulation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axonics Modulation has no effect on the direction of Kala Pharmaceuticals i.e., Kala Pharmaceuticals and Axonics Modulation go up and down completely randomly.
Pair Corralation between Kala Pharmaceuticals and Axonics Modulation
Given the investment horizon of 90 days Kala Pharmaceuticals is expected to under-perform the Axonics Modulation. In addition to that, Kala Pharmaceuticals is 12.85 times more volatile than Axonics Modulation Technologies. It trades about -0.01 of its total potential returns per unit of risk. Axonics Modulation Technologies is currently generating about 0.17 per unit of volatility. If you would invest 6,849 in Axonics Modulation Technologies on July 26, 2024 and sell it today you would earn a total of 179.00 from holding Axonics Modulation Technologies or generate 2.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kala Pharmaceuticals vs. Axonics Modulation Technologie
Performance |
Timeline |
Kala Pharmaceuticals |
Axonics Modulation |
Kala Pharmaceuticals and Axonics Modulation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kala Pharmaceuticals and Axonics Modulation
The main advantage of trading using opposite Kala Pharmaceuticals and Axonics Modulation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kala Pharmaceuticals position performs unexpectedly, Axonics Modulation 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 Axonics Modulation will offset losses from the drop in Axonics Modulation's long position.Kala Pharmaceuticals vs. PetIQ Inc | Kala Pharmaceuticals vs. Emergent Biosolutions | Kala Pharmaceuticals vs. Bausch Health Companies | Kala Pharmaceuticals vs. Neurocrine Biosciences |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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