Correlation Between Keros Therapeutics and Replimune
Can any of the company-specific risk be diversified away by investing in both Keros Therapeutics and Replimune 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 Replimune into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keros Therapeutics and Replimune Group, you can compare the effects of market volatilities on Keros Therapeutics and Replimune 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 Replimune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keros Therapeutics and Replimune.
Diversification Opportunities for Keros Therapeutics and Replimune
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keros and Replimune is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group 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 Replimune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Replimune Group has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and Replimune go up and down completely randomly.
Pair Corralation between Keros Therapeutics and Replimune
Given the investment horizon of 90 days Keros Therapeutics is expected to under-perform the Replimune. But the stock apears to be less risky and, when comparing its historical volatility, Keros Therapeutics is 2.72 times less risky than Replimune. The stock trades about -0.07 of its potential returns per unit of risk. The Replimune Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,205 in Replimune Group on August 29, 2024 and sell it today you would earn a total of 233.00 from holding Replimune Group or generate 19.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keros Therapeutics vs. Replimune Group
Performance |
| Timeline |
| Keros Therapeutics |
| Replimune Group |
Keros Therapeutics and Replimune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keros Therapeutics and Replimune
The main advantage of trading using opposite Keros Therapeutics and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, Replimune 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 Replimune will offset losses from the drop in Replimune's long position.| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
| Replimune vs. Eliem Therapeutics | Replimune vs. Scpharmaceuticals | Replimune vs. Milestone Pharmaceuticals | Replimune vs. Seres Therapeutics |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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