Correlation Between Exscientia and Kronos Bio
Can any of the company-specific risk be diversified away by investing in both Exscientia 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 Exscientia and Kronos Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exscientia Ltd ADR and Kronos Bio, you can compare the effects of market volatilities on Exscientia 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 Exscientia with a short position of Kronos Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exscientia and Kronos Bio.
Diversification Opportunities for Exscientia and Kronos Bio
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Exscientia and Kronos is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Exscientia Ltd ADR and Kronos Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Bio and Exscientia 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 Exscientia Ltd ADR 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 Exscientia i.e., Exscientia and Kronos Bio go up and down completely randomly.
Pair Corralation between Exscientia and Kronos Bio
Given the investment horizon of 90 days Exscientia Ltd ADR is expected to generate 1.08 times more return on investment than Kronos Bio. However, Exscientia is 1.08 times more volatile than Kronos Bio. It trades about 0.0 of its potential returns per unit of risk. Kronos Bio is currently generating about -0.01 per unit of risk. If you would invest 900.00 in Exscientia Ltd ADR on September 26, 2024 and sell it today you would lose (416.00) from holding Exscientia Ltd ADR or give up 46.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.37% |
| Values | Daily Returns |
Exscientia Ltd ADR vs. Kronos Bio
Performance |
| Timeline |
| Exscientia ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kronos Bio |
Exscientia and Kronos Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exscientia and Kronos Bio
The main advantage of trading using opposite Exscientia and Kronos Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exscientia 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.| Exscientia vs. Zura Bio Limited | Exscientia vs. Elevation Oncology | Exscientia vs. Recursion Pharmaceuticals | Exscientia vs. Atea Pharmaceuticals |
| Kronos Bio vs. Fate Therapeutics | Kronos Bio vs. Caribou Biosciences | Kronos Bio vs. Karyopharm Therapeutics | Kronos Bio vs. Hookipa Pharma |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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