Correlation Between Kura Oncology and Banco Latinoamericano

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Can any of the company-specific risk be diversified away by investing in both Kura Oncology and Banco Latinoamericano 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 Kura Oncology and Banco Latinoamericano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kura Oncology and Banco Latinoamericano DE, you can compare the effects of market volatilities on Kura Oncology and Banco Latinoamericano 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 Kura Oncology with a short position of Banco Latinoamericano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Oncology and Banco Latinoamericano.

Diversification Opportunities for Kura Oncology and Banco Latinoamericano

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Kura Oncology and Banco is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kura Oncology and Banco Latinoamericano DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Latinoamericano and Kura Oncology 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 Kura Oncology are associated (or correlated) with Banco Latinoamericano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Latinoamericano has no effect on the direction of Kura Oncology i.e., Kura Oncology and Banco Latinoamericano go up and down completely randomly.

Pair Corralation between Kura Oncology and Banco Latinoamericano

Given the investment horizon of 90 days Kura Oncology is expected to generate 2.67 times more return on investment than Banco Latinoamericano. However, Kura Oncology is 2.67 times more volatile than Banco Latinoamericano DE. It trades about 0.02 of its potential returns per unit of risk. Banco Latinoamericano DE is currently generating about 0.01 per unit of risk. If you would invest  1,638  in Kura Oncology on May 13, 2022 and sell it today you would lose (38.00)  from holding Kura Oncology or give up 2.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Kura Oncology  vs.  Banco Latinoamericano DE

 Performance (%) 
       Timeline  
Kura Oncology 
Kura Oncology Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Kura Oncology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kura Oncology sustained solid returns over the last few months and may actually be approaching a breakup point.

Kura Oncology Price Channel

Banco Latinoamericano 
Banco Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Banco Latinoamericano DE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Banco Latinoamericano is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Banco Price Channel

Kura Oncology and Banco Latinoamericano Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kura Oncology and Banco Latinoamericano

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

Kura Oncology

Pair trading matchups for Kura Oncology

The idea behind Kura Oncology and Banco Latinoamericano DE 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.

Banco Latinoamericano DE

Pair trading matchups for Banco Latinoamericano

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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