Correlation Between Werewolf Therapeutics and Kronos Bio
Can any of the company-specific risk be diversified away by investing in both Werewolf Therapeutics 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 Werewolf Therapeutics and Kronos Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Werewolf Therapeutics and Kronos Bio, you can compare the effects of market volatilities on Werewolf Therapeutics 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 Werewolf Therapeutics with a short position of Kronos Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Werewolf Therapeutics and Kronos Bio.
Diversification Opportunities for Werewolf Therapeutics and Kronos Bio
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Werewolf and Kronos is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Werewolf Therapeutics and Kronos Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Bio and Werewolf 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 Werewolf Therapeutics 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 Werewolf Therapeutics i.e., Werewolf Therapeutics and Kronos Bio go up and down completely randomly.
Pair Corralation between Werewolf Therapeutics and Kronos Bio
Given the investment horizon of 90 days Werewolf Therapeutics is expected to under-perform the Kronos Bio. In addition to that, Werewolf Therapeutics is 1.21 times more volatile than Kronos Bio. It trades about -0.26 of its total potential returns per unit of risk. Kronos Bio is currently generating about 0.0 per unit of volatility. If you would invest 98.00 in Kronos Bio on August 30, 2024 and sell it today you would lose (2.00) from holding Kronos Bio or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Werewolf Therapeutics vs. Kronos Bio
Performance |
| Timeline |
| Werewolf Therapeutics |
| Kronos Bio |
Werewolf Therapeutics and Kronos Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Werewolf Therapeutics and Kronos Bio
The main advantage of trading using opposite Werewolf Therapeutics and Kronos Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Werewolf Therapeutics 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.| Werewolf Therapeutics vs. Ikena Oncology | Werewolf Therapeutics vs. Eliem Therapeutics | Werewolf Therapeutics vs. HCW Biologics | Werewolf Therapeutics vs. RenovoRx |
| Kronos Bio vs. Cyclerion Therapeutics | Kronos Bio vs. Larimar Therapeutics | Kronos Bio vs. Addex Therapeutics | Kronos Bio vs. Achilles Therapeutics PLC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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