Correlation Between Keros Therapeutics and Innovent Biologics
Can any of the company-specific risk be diversified away by investing in both Keros Therapeutics and Innovent Biologics 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 Innovent Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keros Therapeutics and Innovent Biologics, you can compare the effects of market volatilities on Keros Therapeutics and Innovent Biologics 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 Innovent Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keros Therapeutics and Innovent Biologics.
Diversification Opportunities for Keros Therapeutics and Innovent Biologics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Keros and Innovent is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and Innovent Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovent Biologics 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 Innovent Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovent Biologics has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and Innovent Biologics go up and down completely randomly.
Pair Corralation between Keros Therapeutics and Innovent Biologics
Given the investment horizon of 90 days Keros Therapeutics is expected to under-perform the Innovent Biologics. In addition to that, Keros Therapeutics is 1.61 times more volatile than Innovent Biologics. It trades about -0.28 of its total potential returns per unit of risk. Innovent Biologics is currently generating about -0.15 per unit of volatility. If you would invest 477.00 in Innovent Biologics on November 5, 2024 and sell it today you would lose (52.00) from holding Innovent Biologics or give up 10.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Keros Therapeutics vs. Innovent Biologics
Performance |
| Timeline |
| Keros Therapeutics |
| Innovent Biologics |
Keros Therapeutics and Innovent Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keros Therapeutics and Innovent Biologics
The main advantage of trading using opposite Keros Therapeutics and Innovent Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, Innovent Biologics 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 Innovent Biologics will offset losses from the drop in Innovent Biologics' long position.| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
| Innovent Biologics vs. Telix Pharmaceuticals Limited | Innovent Biologics vs. Keros Therapeutics | Innovent Biologics vs. MAIA Biotechnology | Innovent Biologics vs. Clarity Pharmaceuticals |
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 Stocks Directory module to find actively traded stocks across global markets.
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