Correlation Between Keros Therapeutics and Edgewise Therapeutics
Can any of the company-specific risk be diversified away by investing in both Keros Therapeutics and Edgewise 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 Keros Therapeutics and Edgewise Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keros Therapeutics and Edgewise Therapeutics, you can compare the effects of market volatilities on Keros Therapeutics and Edgewise 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 Keros Therapeutics with a short position of Edgewise Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keros Therapeutics and Edgewise Therapeutics.
Diversification Opportunities for Keros Therapeutics and Edgewise Therapeutics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keros and Edgewise is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and Edgewise Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewise Therapeutics 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 Edgewise Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewise Therapeutics has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and Edgewise Therapeutics go up and down completely randomly.
Pair Corralation between Keros Therapeutics and Edgewise Therapeutics
Given the investment horizon of 90 days Keros Therapeutics is expected to under-perform the Edgewise Therapeutics. In addition to that, Keros Therapeutics is 1.27 times more volatile than Edgewise Therapeutics. It trades about -0.09 of its total potential returns per unit of risk. Edgewise Therapeutics is currently generating about -0.11 per unit of volatility. If you would invest 3,404 in Edgewise Therapeutics on August 27, 2024 and sell it today you would lose (206.00) from holding Edgewise Therapeutics or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keros Therapeutics vs. Edgewise Therapeutics
Performance |
| Timeline |
| Keros Therapeutics |
| Edgewise Therapeutics |
Keros Therapeutics and Edgewise Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keros Therapeutics and Edgewise Therapeutics
The main advantage of trading using opposite Keros Therapeutics and Edgewise Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, Edgewise 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 Edgewise Therapeutics will offset losses from the drop in Edgewise Therapeutics' long position.| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
| Edgewise Therapeutics vs. Century Therapeutics | Edgewise Therapeutics vs. C4 Therapeutics | Edgewise Therapeutics vs. Mineralys Therapeutics, Common | Edgewise Therapeutics vs. Cullinan Oncology LLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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