Correlation Between Kiniksa Pharmaceuticals and Spero Therapeutics
Can any of the company-specific risk be diversified away by investing in both Kiniksa Pharmaceuticals and Spero 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 Kiniksa Pharmaceuticals and Spero Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kiniksa Pharmaceuticals and Spero Therapeutics, you can compare the effects of market volatilities on Kiniksa Pharmaceuticals and Spero 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 Kiniksa Pharmaceuticals with a short position of Spero Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiniksa Pharmaceuticals and Spero Therapeutics.
Diversification Opportunities for Kiniksa Pharmaceuticals and Spero Therapeutics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kiniksa and Spero is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kiniksa Pharmaceuticals and Spero Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spero Therapeutics and Kiniksa Pharmaceuticals 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 Kiniksa Pharmaceuticals are associated (or correlated) with Spero Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spero Therapeutics has no effect on the direction of Kiniksa Pharmaceuticals i.e., Kiniksa Pharmaceuticals and Spero Therapeutics go up and down completely randomly.
Pair Corralation between Kiniksa Pharmaceuticals and Spero Therapeutics
Given the investment horizon of 90 days Kiniksa Pharmaceuticals is expected to generate 0.6 times more return on investment than Spero Therapeutics. However, Kiniksa Pharmaceuticals is 1.66 times less risky than Spero Therapeutics. It trades about -0.15 of its potential returns per unit of risk. Spero Therapeutics is currently generating about -0.16 per unit of risk. If you would invest 2,128 in Kiniksa Pharmaceuticals on October 23, 2024 and sell it today you would lose (274.00) from holding Kiniksa Pharmaceuticals or give up 12.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kiniksa Pharmaceuticals vs. Spero Therapeutics
Performance |
| Timeline |
| Kiniksa Pharmaceuticals |
| Spero Therapeutics |
Kiniksa Pharmaceuticals and Spero Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kiniksa Pharmaceuticals and Spero Therapeutics
The main advantage of trading using opposite Kiniksa Pharmaceuticals and Spero Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiniksa Pharmaceuticals position performs unexpectedly, Spero 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 Spero Therapeutics will offset losses from the drop in Spero Therapeutics' long position.| Kiniksa Pharmaceuticals vs. Nuvalent | Kiniksa Pharmaceuticals vs. Ventyx Biosciences | Kiniksa Pharmaceuticals vs. Arcellx | Kiniksa Pharmaceuticals vs. Cullinan Oncology LLC |
| Spero Therapeutics vs. Assembly Biosciences | Spero Therapeutics vs. Achilles Therapeutics PLC | Spero Therapeutics vs. Instil Bio | Spero Therapeutics vs. CytomX 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |