Correlation Between Krystal Biotech and Blueprint Medicines
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Blueprint Medicines 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 Blueprint Medicines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krystal Biotech and Blueprint Medicines Corp, you can compare the effects of market volatilities on Krystal Biotech and Blueprint Medicines 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 Blueprint Medicines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Blueprint Medicines.
Diversification Opportunities for Krystal Biotech and Blueprint Medicines
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Krystal and Blueprint is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Blueprint Medicines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blueprint Medicines Corp 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 Blueprint Medicines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blueprint Medicines Corp has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Blueprint Medicines go up and down completely randomly.
Pair Corralation between Krystal Biotech and Blueprint Medicines
Given the investment horizon of 90 days Krystal Biotech is expected to generate 43.9 times less return on investment than Blueprint Medicines. But when comparing it to its historical volatility, Krystal Biotech is 2.25 times less risky than Blueprint Medicines. It trades about 0.02 of its potential returns per unit of risk. Blueprint Medicines Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 8,722 in Blueprint Medicines Corp on November 1, 2024 and sell it today you would earn a total of 2,680 from holding Blueprint Medicines Corp or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krystal Biotech vs. Blueprint Medicines Corp
Performance |
| Timeline |
| Krystal Biotech |
| Blueprint Medicines Corp |
Krystal Biotech and Blueprint Medicines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and Blueprint Medicines
The main advantage of trading using opposite Krystal Biotech and Blueprint Medicines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Blueprint Medicines 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 Blueprint Medicines will offset losses from the drop in Blueprint Medicines' long position.| Krystal Biotech vs. MeiraGTx Holdings PLC | Krystal Biotech vs. Apellis Pharmaceuticals | Krystal Biotech vs. Regenxbio | Krystal Biotech vs. Rhythm Pharmaceuticals |
| Blueprint Medicines vs. Terns Pharmaceuticals | Blueprint Medicines vs. Amylyx Pharmaceuticals | Blueprint Medicines vs. Acumen Pharmaceuticals | Blueprint Medicines vs. Inozyme Pharma |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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