Correlation Between Kronos Bio and Eliem Therapeutics
Can any of the company-specific risk be diversified away by investing in both Kronos Bio and Eliem 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 Kronos Bio and Eliem Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kronos Bio and Eliem Therapeutics, you can compare the effects of market volatilities on Kronos Bio and Eliem 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 Kronos Bio with a short position of Eliem Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kronos Bio and Eliem Therapeutics.
Diversification Opportunities for Kronos Bio and Eliem Therapeutics
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kronos and Eliem is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Bio and Eliem Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eliem Therapeutics and Kronos 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 Kronos Bio are associated (or correlated) with Eliem Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eliem Therapeutics has no effect on the direction of Kronos Bio i.e., Kronos Bio and Eliem Therapeutics go up and down completely randomly.
Pair Corralation between Kronos Bio and Eliem Therapeutics
Given the investment horizon of 90 days Kronos Bio is expected to generate 0.71 times more return on investment than Eliem Therapeutics. However, Kronos Bio is 1.4 times less risky than Eliem Therapeutics. It trades about -0.11 of its potential returns per unit of risk. Eliem Therapeutics is currently generating about -0.29 per unit of risk. If you would invest 98.00 in Kronos Bio on August 28, 2024 and sell it today you would lose (9.00) from holding Kronos Bio or give up 9.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Kronos Bio vs. Eliem Therapeutics
Performance |
| Timeline |
| Kronos Bio |
| Eliem Therapeutics |
Kronos Bio and Eliem Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kronos Bio and Eliem Therapeutics
The main advantage of trading using opposite Kronos Bio and Eliem Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kronos Bio position performs unexpectedly, Eliem 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 Eliem Therapeutics will offset losses from the drop in Eliem Therapeutics' long position.| Kronos Bio vs. Cyclerion Therapeutics | Kronos Bio vs. Larimar Therapeutics | Kronos Bio vs. Addex Therapeutics | Kronos Bio vs. Achilles Therapeutics PLC |
| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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