Correlation Between Kronos Bio and Stoke Therapeutics
Can any of the company-specific risk be diversified away by investing in both Kronos Bio and Stoke 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 Stoke 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 Stoke Therapeutics, you can compare the effects of market volatilities on Kronos Bio and Stoke 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 Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kronos Bio and Stoke Therapeutics.
Diversification Opportunities for Kronos Bio and Stoke Therapeutics
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kronos and Stoke is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Bio and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke 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 Stoke Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoke Therapeutics has no effect on the direction of Kronos Bio i.e., Kronos Bio and Stoke Therapeutics go up and down completely randomly.
Pair Corralation between Kronos Bio and Stoke Therapeutics
Given the investment horizon of 90 days Kronos Bio is expected to generate 1.18 times more return on investment than Stoke Therapeutics. However, Kronos Bio is 1.18 times more volatile than Stoke Therapeutics. It trades about 0.0 of its potential returns per unit of risk. Stoke Therapeutics is currently generating about -0.03 per unit of risk. 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 |
Kronos Bio vs. Stoke Therapeutics
Performance |
| Timeline |
| Kronos Bio |
| Stoke Therapeutics |
Kronos Bio and Stoke Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kronos Bio and Stoke Therapeutics
The main advantage of trading using opposite Kronos Bio and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kronos Bio position performs unexpectedly, Stoke 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 Stoke Therapeutics will offset losses from the drop in Stoke Therapeutics' long position.| Kronos Bio vs. Cyclerion Therapeutics | Kronos Bio vs. Larimar Therapeutics | Kronos Bio vs. Addex Therapeutics | Kronos Bio vs. Achilles Therapeutics PLC |
| Stoke Therapeutics vs. Ikena Oncology | Stoke Therapeutics vs. Eliem Therapeutics | Stoke Therapeutics vs. HCW Biologics | Stoke Therapeutics vs. RenovoRx |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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