Correlation Between Keros Therapeutics and Xencor
Can any of the company-specific risk be diversified away by investing in both Keros Therapeutics and Xencor 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 Xencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keros Therapeutics and Xencor Inc, you can compare the effects of market volatilities on Keros Therapeutics and Xencor 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 Xencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keros Therapeutics and Xencor.
Diversification Opportunities for Keros Therapeutics and Xencor
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keros and Xencor is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc 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 Xencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xencor Inc has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and Xencor go up and down completely randomly.
Pair Corralation between Keros Therapeutics and Xencor
Given the investment horizon of 90 days Keros Therapeutics is expected to generate 0.86 times more return on investment than Xencor. However, Keros Therapeutics is 1.17 times less risky than Xencor. It trades about 0.07 of its potential returns per unit of risk. Xencor Inc is currently generating about 0.03 per unit of risk. If you would invest 4,631 in Keros Therapeutics on August 28, 2024 and sell it today you would earn a total of 1,108 from holding Keros Therapeutics or generate 23.93% 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. Xencor Inc
Performance |
| Timeline |
| Keros Therapeutics |
| Xencor Inc |
Keros Therapeutics and Xencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keros Therapeutics and Xencor
The main advantage of trading using opposite Keros Therapeutics and Xencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, Xencor 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 Xencor will offset losses from the drop in Xencor's long position.| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux Therapeutics |
| Xencor vs. Edgewise Therapeutics | Xencor vs. Keros Therapeutics | Xencor vs. Monte Rosa Therapeutics | Xencor vs. Mineralys Therapeutics, Common |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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