Correlation Between Absci Corp and Kronos Bio
Can any of the company-specific risk be diversified away by investing in both Absci Corp and Kronos Bio 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 Absci Corp and Kronos Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absci Corp and Kronos Bio, you can compare the effects of market volatilities on Absci Corp and Kronos Bio 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 Absci Corp with a short position of Kronos Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absci Corp and Kronos Bio.
Diversification Opportunities for Absci Corp and Kronos Bio
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Absci and Kronos is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Absci Corp and Kronos Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Bio and Absci Corp 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 Absci Corp are associated (or correlated) with Kronos Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Bio has no effect on the direction of Absci Corp i.e., Absci Corp and Kronos Bio go up and down completely randomly.
Pair Corralation between Absci Corp and Kronos Bio
Given the investment horizon of 90 days Absci Corp is expected to under-perform the Kronos Bio. In addition to that, Absci Corp is 1.42 times more volatile than Kronos Bio. It trades about -0.46 of its total potential returns per unit of risk. Kronos Bio is currently generating about -0.11 per unit of volatility. If you would invest 98.00 in Kronos Bio on August 27, 2024 and sell it today you would lose (9.00) from holding Kronos Bio or give up 9.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absci Corp vs. Kronos Bio
Performance |
| Timeline |
| Absci Corp |
| Kronos Bio |
Absci Corp and Kronos Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absci Corp and Kronos Bio
The main advantage of trading using opposite Absci Corp and Kronos Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absci Corp position performs unexpectedly, Kronos Bio 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 Kronos Bio will offset losses from the drop in Kronos Bio's long position.| Absci Corp vs. Recursion Pharmaceuticals | Absci Corp vs. Affimed NV | Absci Corp vs. Sana Biotechnology | Absci Corp vs. Relay Therapeutics |
| Kronos Bio vs. Cyclerion Therapeutics | Kronos Bio vs. Larimar Therapeutics | Kronos Bio vs. Addex Therapeutics | Kronos Bio vs. Achilles Therapeutics PLC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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