Correlation Between Krystal Biotech and Apellis Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Apellis Pharmaceuticals 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 Krystal Biotech and Apellis Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krystal Biotech and Apellis Pharmaceuticals, you can compare the effects of market volatilities on Krystal Biotech and Apellis Pharmaceuticals 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 Krystal Biotech with a short position of Apellis Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Apellis Pharmaceuticals.
Diversification Opportunities for Krystal Biotech and Apellis Pharmaceuticals
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Krystal and Apellis is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Apellis Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apellis Pharmaceuticals and Krystal Biotech 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 Krystal Biotech are associated (or correlated) with Apellis Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apellis Pharmaceuticals has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Apellis Pharmaceuticals go up and down completely randomly.
Pair Corralation between Krystal Biotech and Apellis Pharmaceuticals
Given the investment horizon of 90 days Krystal Biotech is expected to generate 0.77 times more return on investment than Apellis Pharmaceuticals. However, Krystal Biotech is 1.3 times less risky than Apellis Pharmaceuticals. It trades about 0.07 of its potential returns per unit of risk. Apellis Pharmaceuticals is currently generating about 0.01 per unit of risk. If you would invest 7,440 in Krystal Biotech on August 28, 2024 and sell it today you would earn a total of 12,016 from holding Krystal Biotech or generate 161.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krystal Biotech vs. Apellis Pharmaceuticals
Performance |
| Timeline |
| Krystal Biotech |
| Apellis Pharmaceuticals |
Krystal Biotech and Apellis Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and Apellis Pharmaceuticals
The main advantage of trading using opposite Krystal Biotech and Apellis Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Apellis Pharmaceuticals 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 Apellis Pharmaceuticals will offset losses from the drop in Apellis Pharmaceuticals' long position.| Krystal Biotech vs. Eliem Therapeutics | Krystal Biotech vs. HCW Biologics | Krystal Biotech vs. Scpharmaceuticals | Krystal Biotech vs. Milestone Pharmaceuticals |
| Apellis Pharmaceuticals vs. Eliem Therapeutics | Apellis Pharmaceuticals vs. HCW Biologics | Apellis Pharmaceuticals vs. Scpharmaceuticals | Apellis Pharmaceuticals vs. Milestone 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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