Correlation Between HCW Biologics and Keros Therapeutics
Can any of the company-specific risk be diversified away by investing in both HCW Biologics and Keros 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 HCW Biologics and Keros Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCW Biologics and Keros Therapeutics, you can compare the effects of market volatilities on HCW Biologics and Keros 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 HCW Biologics with a short position of Keros Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCW Biologics and Keros Therapeutics.
Diversification Opportunities for HCW Biologics and Keros Therapeutics
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HCW and Keros is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding HCW Biologics and Keros Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros Therapeutics and HCW Biologics 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 HCW Biologics are associated (or correlated) with Keros Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keros Therapeutics has no effect on the direction of HCW Biologics i.e., HCW Biologics and Keros Therapeutics go up and down completely randomly.
Pair Corralation between HCW Biologics and Keros Therapeutics
Given the investment horizon of 90 days HCW Biologics is expected to generate 10.44 times more return on investment than Keros Therapeutics. However, HCW Biologics is 10.44 times more volatile than Keros Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Keros Therapeutics is currently generating about 0.07 per unit of risk. If you would invest 109.00 in HCW Biologics on August 28, 2024 and sell it today you would lose (48.00) from holding HCW Biologics or give up 44.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCW Biologics vs. Keros Therapeutics
Performance |
| Timeline |
| HCW Biologics |
| Keros Therapeutics |
HCW Biologics and Keros Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCW Biologics and Keros Therapeutics
The main advantage of trading using opposite HCW Biologics and Keros Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCW Biologics position performs unexpectedly, Keros 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 Keros Therapeutics will offset losses from the drop in Keros Therapeutics' long position.| HCW Biologics vs. Eliem Therapeutics | HCW Biologics vs. Scpharmaceuticals | HCW Biologics vs. Milestone Pharmaceuticals | HCW Biologics vs. Seres Therapeutics |
| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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