Correlation Between Arcellx and Keros Therapeutics
Can any of the company-specific risk be diversified away by investing in both Arcellx and Keros Therapeutics 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 Arcellx and Keros Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcellx and Keros Therapeutics, you can compare the effects of market volatilities on Arcellx and Keros Therapeutics 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 Arcellx with a short position of Keros Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcellx and Keros Therapeutics.
Diversification Opportunities for Arcellx and Keros Therapeutics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Arcellx and Keros is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Arcellx and Keros Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros Therapeutics and Arcellx 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 Arcellx are associated (or correlated) with Keros Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keros Therapeutics has no effect on the direction of Arcellx i.e., Arcellx and Keros Therapeutics go up and down completely randomly.
Pair Corralation between Arcellx and Keros Therapeutics
Given the investment horizon of 90 days Arcellx is expected to generate 1.06 times more return on investment than Keros Therapeutics. However, Arcellx is 1.06 times more volatile than Keros Therapeutics. It trades about 0.1 of its potential returns per unit of risk. Keros Therapeutics is currently generating about 0.02 per unit of risk. If you would invest 1,947 in Arcellx on August 25, 2024 and sell it today you would earn a total of 7,097 from holding Arcellx or generate 364.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Arcellx vs. Keros Therapeutics
Performance |
| Timeline |
| Arcellx |
| Keros Therapeutics |
Arcellx and Keros Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcellx and Keros Therapeutics
The main advantage of trading using opposite Arcellx and Keros Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcellx position performs unexpectedly, Keros Therapeutics 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 Keros Therapeutics will offset losses from the drop in Keros Therapeutics' long position.| Arcellx vs. Nuvalent | Arcellx vs. Ventyx Biosciences | Arcellx vs. Amylyx Pharmaceuticals | Arcellx vs. Day One Biopharmaceuticals |
| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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