Correlation Between Keros Therapeutics and Oncology Pharma
Can any of the company-specific risk be diversified away by investing in both Keros Therapeutics and Oncology Pharma 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 Oncology Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keros Therapeutics and Oncology Pharma, you can compare the effects of market volatilities on Keros Therapeutics and Oncology Pharma 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 Oncology Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keros Therapeutics and Oncology Pharma.
Diversification Opportunities for Keros Therapeutics and Oncology Pharma
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Keros and Oncology is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and Oncology Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncology Pharma 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 Oncology Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncology Pharma has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and Oncology Pharma go up and down completely randomly.
Pair Corralation between Keros Therapeutics and Oncology Pharma
Given the investment horizon of 90 days Keros Therapeutics is expected to under-perform the Oncology Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Keros Therapeutics is 100.24 times less risky than Oncology Pharma. The stock trades about -0.04 of its potential returns per unit of risk. The Oncology Pharma is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Oncology Pharma on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Oncology Pharma or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Keros Therapeutics vs. Oncology Pharma
Performance |
| Timeline |
| Keros Therapeutics |
| Oncology Pharma |
Keros Therapeutics and Oncology Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keros Therapeutics and Oncology Pharma
The main advantage of trading using opposite Keros Therapeutics and Oncology Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, Oncology Pharma 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 Oncology Pharma will offset losses from the drop in Oncology Pharma's long position.| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
| Oncology Pharma vs. Regen BioPharma | Oncology Pharma vs. Regen BioPharma | Oncology Pharma vs. Therapeutic Solutions International | Oncology Pharma vs. Alpha Cognition |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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