Correlation Between ELYM Old and Karuna Therapeutics
Can any of the company-specific risk be diversified away by investing in both ELYM Old and Karuna 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 ELYM Old and Karuna Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELYM Old and Karuna Therapeutics, you can compare the effects of market volatilities on ELYM Old and Karuna 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 ELYM Old with a short position of Karuna Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELYM Old and Karuna Therapeutics.
Diversification Opportunities for ELYM Old and Karuna Therapeutics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELYM and Karuna is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ELYM Old and Karuna Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karuna Therapeutics and ELYM Old 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 ELYM Old are associated (or correlated) with Karuna Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karuna Therapeutics has no effect on the direction of ELYM Old i.e., ELYM Old and Karuna Therapeutics go up and down completely randomly.
Pair Corralation between ELYM Old and Karuna Therapeutics
If you would invest (100.00) in Karuna Therapeutics on November 30, 2024 and sell it today you would earn a total of 100.00 from holding Karuna Therapeutics or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELYM Old vs. Karuna Therapeutics
Performance |
| Timeline |
| ELYM Old |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Karuna Therapeutics |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
ELYM Old and Karuna Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELYM Old and Karuna Therapeutics
The main advantage of trading using opposite ELYM Old and Karuna Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELYM Old position performs unexpectedly, Karuna 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 Karuna Therapeutics will offset losses from the drop in Karuna Therapeutics' long position.The idea behind ELYM Old and Karuna Therapeutics 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.| Karuna Therapeutics vs. Blueprint Medicines Corp | Karuna Therapeutics vs. Amylyx Pharmaceuticals | Karuna Therapeutics vs. Day One Biopharmaceuticals | Karuna Therapeutics vs. X4 Pharmaceuticals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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