Correlation Between Innovent Biologics and Keros Therapeutics
Can any of the company-specific risk be diversified away by investing in both Innovent 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 Innovent 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 Innovent Biologics and Keros Therapeutics, you can compare the effects of market volatilities on Innovent 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 Innovent Biologics with a short position of Keros Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovent Biologics and Keros Therapeutics.
Diversification Opportunities for Innovent Biologics and Keros Therapeutics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innovent and Keros is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Innovent Biologics and Keros Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros Therapeutics and Innovent 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 Innovent 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 Innovent Biologics i.e., Innovent Biologics and Keros Therapeutics go up and down completely randomly.
Pair Corralation between Innovent Biologics and Keros Therapeutics
Assuming the 90 days horizon Innovent Biologics is expected to generate 0.62 times more return on investment than Keros Therapeutics. However, Innovent Biologics is 1.61 times less risky than Keros Therapeutics. It trades about -0.15 of its potential returns per unit of risk. Keros Therapeutics is currently generating about -0.28 per unit of risk. If you would invest 477.00 in Innovent Biologics on November 5, 2024 and sell it today you would lose (52.00) from holding Innovent Biologics or give up 10.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Innovent Biologics vs. Keros Therapeutics
Performance |
| Timeline |
| Innovent Biologics |
| Keros Therapeutics |
Innovent Biologics and Keros Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovent Biologics and Keros Therapeutics
The main advantage of trading using opposite Innovent Biologics and Keros Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovent 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.| Innovent Biologics vs. Telix Pharmaceuticals Limited | Innovent Biologics vs. Keros Therapeutics | Innovent Biologics vs. MAIA Biotechnology | Innovent Biologics vs. Clarity Pharmaceuticals |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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