Correlation Between Keros Therapeutics and GH Research
Can any of the company-specific risk be diversified away by investing in both Keros Therapeutics and GH Research 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 GH Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keros Therapeutics and GH Research PLC, you can compare the effects of market volatilities on Keros Therapeutics and GH Research 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 GH Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keros Therapeutics and GH Research.
Diversification Opportunities for Keros Therapeutics and GH Research
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Keros and GHRS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and GH Research PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GH Research PLC 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 GH Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GH Research PLC has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and GH Research go up and down completely randomly.
Pair Corralation between Keros Therapeutics and GH Research
Given the investment horizon of 90 days Keros Therapeutics is expected to under-perform the GH Research. But the stock apears to be less risky and, when comparing its historical volatility, Keros Therapeutics is 1.02 times less risky than GH Research. The stock trades about -0.37 of its potential returns per unit of risk. The GH Research PLC is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 709.00 in GH Research PLC on October 25, 2024 and sell it today you would earn a total of 171.00 from holding GH Research PLC or generate 24.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keros Therapeutics vs. GH Research PLC
Performance |
| Timeline |
| Keros Therapeutics |
| GH Research PLC |
Keros Therapeutics and GH Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keros Therapeutics and GH Research
The main advantage of trading using opposite Keros Therapeutics and GH Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, GH Research 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 GH Research will offset losses from the drop in GH Research's long position.| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
| GH Research vs. Molecular Partners AG | GH Research vs. MediciNova | GH Research vs. Anebulo Pharmaceuticals | GH Research vs. Champions Oncology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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