Correlation Between Eliem Therapeutics and Krystal Biotech
Can any of the company-specific risk be diversified away by investing in both Eliem Therapeutics and Krystal Biotech 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 Eliem Therapeutics and Krystal Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eliem Therapeutics and Krystal Biotech, you can compare the effects of market volatilities on Eliem Therapeutics and Krystal Biotech 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 Eliem Therapeutics with a short position of Krystal Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eliem Therapeutics and Krystal Biotech.
Diversification Opportunities for Eliem Therapeutics and Krystal Biotech
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eliem and Krystal is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and Krystal Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krystal Biotech and Eliem 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 Eliem Therapeutics are associated (or correlated) with Krystal Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krystal Biotech has no effect on the direction of Eliem Therapeutics i.e., Eliem Therapeutics and Krystal Biotech go up and down completely randomly.
Pair Corralation between Eliem Therapeutics and Krystal Biotech
Given the investment horizon of 90 days Eliem Therapeutics is expected to under-perform the Krystal Biotech. In addition to that, Eliem Therapeutics is 1.62 times more volatile than Krystal Biotech. It trades about -0.29 of its total potential returns per unit of risk. Krystal Biotech is currently generating about 0.17 per unit of volatility. If you would invest 17,689 in Krystal Biotech on August 29, 2024 and sell it today you would earn a total of 1,963 from holding Krystal Biotech or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Eliem Therapeutics vs. Krystal Biotech
Performance |
| Timeline |
| Eliem Therapeutics |
| Krystal Biotech |
Eliem Therapeutics and Krystal Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eliem Therapeutics and Krystal Biotech
The main advantage of trading using opposite Eliem Therapeutics and Krystal Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eliem Therapeutics position performs unexpectedly, Krystal Biotech 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 Krystal Biotech will offset losses from the drop in Krystal Biotech's long position.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
| Krystal Biotech vs. MeiraGTx Holdings PLC | Krystal Biotech vs. Apellis Pharmaceuticals | Krystal Biotech vs. Regenxbio | Krystal Biotech vs. Rhythm 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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