Correlation Between Kronos Bio and XBiotech
Can any of the company-specific risk be diversified away by investing in both Kronos Bio and XBiotech 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 XBiotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kronos Bio and XBiotech, you can compare the effects of market volatilities on Kronos Bio and XBiotech 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 XBiotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kronos Bio and XBiotech.
Diversification Opportunities for Kronos Bio and XBiotech
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kronos and XBiotech is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Bio and XBiotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBiotech 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 XBiotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBiotech has no effect on the direction of Kronos Bio i.e., Kronos Bio and XBiotech go up and down completely randomly.
Pair Corralation between Kronos Bio and XBiotech
Given the investment horizon of 90 days Kronos Bio is expected to under-perform the XBiotech. But the stock apears to be less risky and, when comparing its historical volatility, Kronos Bio is 1.29 times less risky than XBiotech. The stock trades about -0.02 of its potential returns per unit of risk. The XBiotech is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 572.00 in XBiotech on September 4, 2024 and sell it today you would earn a total of 101.00 from holding XBiotech or generate 17.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kronos Bio vs. XBiotech
Performance |
| Timeline |
| Kronos Bio |
| XBiotech |
Kronos Bio and XBiotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kronos Bio and XBiotech
The main advantage of trading using opposite Kronos Bio and XBiotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kronos Bio position performs unexpectedly, XBiotech 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 XBiotech will offset losses from the drop in XBiotech's long position.| Kronos Bio vs. Candel Therapeutics | Kronos Bio vs. Cingulate Warrants | Kronos Bio vs. Unicycive Therapeutics | Kronos Bio vs. Cardio Diagnostics Holdings |
| XBiotech vs. Generation Bio Co | XBiotech vs. Kronos Bio | XBiotech vs. Erasca Inc | XBiotech vs. C4 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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