Correlation Between Kalvista Pharmaceuticals and ProKidney Corp

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

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

Diversification Opportunities for Kalvista Pharmaceuticals and ProKidney Corp

0.8

Correlation Coefficient

Kalvista Pharmaceuticals  ProKidney Corp

Very poor diversification

The 3 months correlation between Kalvista and ProKidney is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kalvista Pharmaceuticals and ProKidney Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProKidney Corp and Kalvista 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 Kalvista Pharmaceuticals are associated (or correlated) with ProKidney Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProKidney Corp has no effect on the direction of Kalvista Pharmaceuticals i.e., Kalvista Pharmaceuticals and ProKidney Corp go up and down completely randomly.

Pair Corralation between Kalvista Pharmaceuticals and ProKidney Corp

Given the investment horizon of 90 days Kalvista Pharmaceuticals is expected to generate 36.14 times less return on investment than ProKidney Corp. But when comparing it to its historical volatility, Kalvista Pharmaceuticals is 14.3 times less risky than ProKidney Corp. It trades about 0.05 of its potential returns per unit of risk. ProKidney Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  64.00  in ProKidney Corp on May 7, 2025 and sell it today you would earn a total of  254.00  from holding ProKidney Corp or generate 396.88% return on investment over 90 days.

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

Kalvista Pharmaceuticals  vs.  ProKidney Corp

Kalvista Pharmaceuticals

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Kalvista Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Kalvista Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

ProKidney Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ProKidney Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, ProKidney Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kalvista Pharmaceuticals and ProKidney Corp

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

The idea behind Kalvista Pharmaceuticals and ProKidney Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.