Correlation Between Gossamer Bio and Kura Oncology
Can any of the company-specific risk be diversified away by investing in both Gossamer Bio and Kura Oncology 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 Gossamer Bio and Kura Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gossamer Bio and Kura Oncology, you can compare the effects of market volatilities on Gossamer Bio and Kura Oncology 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 Gossamer Bio with a short position of Kura Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gossamer Bio and Kura Oncology.
Diversification Opportunities for Gossamer Bio and Kura Oncology
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gossamer and Kura is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Gossamer Bio and Kura Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Oncology and Gossamer Bio 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 Gossamer Bio are associated (or correlated) with Kura Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Oncology has no effect on the direction of Gossamer Bio i.e., Gossamer Bio and Kura Oncology go up and down completely randomly.
Pair Corralation between Gossamer Bio and Kura Oncology
Given the investment horizon of 90 days Gossamer Bio is expected to generate 0.3 times more return on investment than Kura Oncology. However, Gossamer Bio is 3.32 times less risky than Kura Oncology. It trades about -0.48 of its potential returns per unit of risk. Kura Oncology is currently generating about -0.21 per unit of risk. If you would invest 92.00 in Gossamer Bio on August 27, 2024 and sell it today you would lose (22.00) from holding Gossamer Bio or give up 23.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gossamer Bio vs. Kura Oncology
Performance |
| Timeline |
| Gossamer Bio |
| Kura Oncology |
Gossamer Bio and Kura Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gossamer Bio and Kura Oncology
The main advantage of trading using opposite Gossamer Bio and Kura Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gossamer Bio position performs unexpectedly, Kura Oncology 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 Kura Oncology will offset losses from the drop in Kura Oncology's long position.| Gossamer Bio vs. Biomea Fusion | Gossamer Bio vs. Stoke Therapeutics | Gossamer Bio vs. Akero Therapeutics | Gossamer Bio vs. Replimune Group |
| Kura Oncology vs. Protagonist Therapeutics | Kura Oncology vs. Merus BV | Kura Oncology vs. Replimune Group | Kura Oncology vs. Kalvista 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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