Correlation Between Avenue Therapeutics and Kezar Life
Can any of the company-specific risk be diversified away by investing in both Avenue Therapeutics and Kezar Life 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 Avenue Therapeutics and Kezar Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avenue Therapeutics and Kezar Life Sciences, you can compare the effects of market volatilities on Avenue Therapeutics and Kezar Life 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 Avenue Therapeutics with a short position of Kezar Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avenue Therapeutics and Kezar Life.
Diversification Opportunities for Avenue Therapeutics and Kezar Life
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avenue and Kezar is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Avenue Therapeutics and Kezar Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kezar Life Sciences and Avenue Therapeutics 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 Avenue Therapeutics are associated (or correlated) with Kezar Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kezar Life Sciences has no effect on the direction of Avenue Therapeutics i.e., Avenue Therapeutics and Kezar Life go up and down completely randomly.
Pair Corralation between Avenue Therapeutics and Kezar Life
Given the investment horizon of 90 days Avenue Therapeutics is expected to under-perform the Kezar Life. In addition to that, Avenue Therapeutics is 2.86 times more volatile than Kezar Life Sciences. It trades about -0.24 of its total potential returns per unit of risk. Kezar Life Sciences is currently generating about -0.02 per unit of volatility. If you would invest 657.00 in Kezar Life Sciences on November 3, 2024 and sell it today you would lose (9.00) from holding Kezar Life Sciences or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avenue Therapeutics vs. Kezar Life Sciences
Performance |
| Timeline |
| Avenue Therapeutics |
| Kezar Life Sciences |
Avenue Therapeutics and Kezar Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avenue Therapeutics and Kezar Life
The main advantage of trading using opposite Avenue Therapeutics and Kezar Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avenue Therapeutics position performs unexpectedly, Kezar Life 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 Kezar Life will offset losses from the drop in Kezar Life's long position.| Avenue Therapeutics vs. Hoth Therapeutics | Avenue Therapeutics vs. Revelation Biosciences | Avenue Therapeutics vs. Virax Biolabs Group | Avenue Therapeutics vs. Palisade Bio |
| Kezar Life vs. Century Therapeutics | Kezar Life vs. Mineralys Therapeutics, Common | Kezar Life vs. Nkarta Inc | Kezar Life vs. Surrozen |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |