Correlation Between Keros Therapeutics and SpringWorks Therapeutics
Can any of the company-specific risk be diversified away by investing in both Keros Therapeutics and SpringWorks 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 SpringWorks 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 SpringWorks Therapeutics, you can compare the effects of market volatilities on Keros Therapeutics and SpringWorks 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 SpringWorks Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keros Therapeutics and SpringWorks Therapeutics.
Diversification Opportunities for Keros Therapeutics and SpringWorks Therapeutics
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Keros and SpringWorks is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and SpringWorks Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpringWorks 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 SpringWorks Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpringWorks Therapeutics has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and SpringWorks Therapeutics go up and down completely randomly.
Pair Corralation between Keros Therapeutics and SpringWorks Therapeutics
Given the investment horizon of 90 days Keros Therapeutics is expected to generate 1.02 times less return on investment than SpringWorks Therapeutics. But when comparing it to its historical volatility, Keros Therapeutics is 1.04 times less risky than SpringWorks Therapeutics. It trades about 0.08 of its potential returns per unit of risk. SpringWorks Therapeutics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,255 in SpringWorks Therapeutics on September 1, 2024 and sell it today you would earn a total of 1,893 from holding SpringWorks Therapeutics or generate 83.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keros Therapeutics vs. SpringWorks Therapeutics
Performance |
| Timeline |
| Keros Therapeutics |
| SpringWorks Therapeutics |
Keros Therapeutics and SpringWorks Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keros Therapeutics and SpringWorks Therapeutics
The main advantage of trading using opposite Keros Therapeutics and SpringWorks Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, SpringWorks 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 SpringWorks Therapeutics will offset losses from the drop in SpringWorks Therapeutics' long position.| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
| SpringWorks Therapeutics vs. Relay Therapeutics | SpringWorks Therapeutics vs. Stoke Therapeutics | SpringWorks Therapeutics vs. Pliant Therapeutics | SpringWorks Therapeutics vs. Black Diamond 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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