Correlation Between Kineta and HealthEquity

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

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

Diversification Opportunities for Kineta and HealthEquity

-0.4

Correlation Coefficient

Kineta  HealthEquity

Very good diversification

The 3 months correlation between Kineta and HealthEquity is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kineta Inc and HealthEquity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthEquity and Kineta 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 Kineta Inc are associated (or correlated) with HealthEquity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthEquity has no effect on the direction of Kineta i.e., Kineta and HealthEquity go up and down completely randomly.

Pair Corralation between Kineta and HealthEquity

Allowing for the 90-day total investment horizon Kineta Inc is expected to generate 9.81 times more return on investment than HealthEquity. However, Kineta is 9.81 times more volatile than HealthEquity. It trades about 0.11 of its potential returns per unit of risk. HealthEquity is currently generating about -0.05 per unit of risk. If you would invest  53.00  in Kineta Inc on January 28, 2024 and sell it today you would earn a total of  8.00  from holding Kineta Inc or generate 15.09% return on investment over 90 days.

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

Kineta Inc  vs.  HealthEquity

Kineta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kineta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

HealthEquity

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HealthEquity are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, HealthEquity is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kineta and HealthEquity

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

The idea behind Kineta Inc and HealthEquity 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 Commodity Directory module to find actively traded commodities issued by global exchanges.