Correlation Between Keros Therapeutics and Chimerix
Can any of the company-specific risk be diversified away by investing in both Keros Therapeutics and Chimerix 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 Keros Therapeutics and Chimerix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keros Therapeutics and Chimerix, you can compare the effects of market volatilities on Keros Therapeutics and Chimerix 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 Keros Therapeutics with a short position of Chimerix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keros Therapeutics and Chimerix.
Diversification Opportunities for Keros Therapeutics and Chimerix
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Keros and Chimerix is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and Chimerix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimerix and Keros Therapeutics 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 Keros Therapeutics are associated (or correlated) with Chimerix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimerix has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and Chimerix go up and down completely randomly.
Pair Corralation between Keros Therapeutics and Chimerix
Given the investment horizon of 90 days Keros Therapeutics is expected to generate 1.06 times more return on investment than Chimerix. However, Keros Therapeutics is 1.06 times more volatile than Chimerix. It trades about 0.05 of its potential returns per unit of risk. Chimerix is currently generating about -0.01 per unit of risk. If you would invest 3,936 in Keros Therapeutics on August 28, 2024 and sell it today you would earn a total of 1,722 from holding Keros Therapeutics or generate 43.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keros Therapeutics vs. Chimerix
Performance |
| Timeline |
| Keros Therapeutics |
| Chimerix |
Keros Therapeutics and Chimerix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keros Therapeutics and Chimerix
The main advantage of trading using opposite Keros Therapeutics and Chimerix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, Chimerix 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 Chimerix will offset losses from the drop in Chimerix's long position.| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
| Chimerix vs. Assembly Biosciences | Chimerix vs. Spero Therapeutics | Chimerix vs. Achilles Therapeutics PLC | Chimerix vs. Instil Bio |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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