Correlation Between Krystal Biotech and Charles River
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Charles River 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 Charles River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krystal Biotech and Charles River Laboratories, you can compare the effects of market volatilities on Krystal Biotech and Charles River 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 Charles River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Charles River.
Diversification Opportunities for Krystal Biotech and Charles River
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Krystal and Charles is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Charles River Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charles River Labora 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 Charles River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charles River Labora has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Charles River go up and down completely randomly.
Pair Corralation between Krystal Biotech and Charles River
Given the investment horizon of 90 days Krystal Biotech is expected to generate 1.53 times more return on investment than Charles River. However, Krystal Biotech is 1.53 times more volatile than Charles River Laboratories. It trades about 0.06 of its potential returns per unit of risk. Charles River Laboratories is currently generating about -0.02 per unit of risk. If you would invest 7,756 in Krystal Biotech on November 9, 2024 and sell it today you would earn a total of 8,350 from holding Krystal Biotech or generate 107.66% 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. Charles River Laboratories
Performance |
| Timeline |
| Krystal Biotech |
| Charles River Labora |
Krystal Biotech and Charles River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and Charles River
The main advantage of trading using opposite Krystal Biotech and Charles River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Charles River 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 Charles River will offset losses from the drop in Charles River's long position.| Krystal Biotech vs. MeiraGTx Holdings PLC | Krystal Biotech vs. Apellis Pharmaceuticals | Krystal Biotech vs. Regenxbio | Krystal Biotech vs. Rhythm Pharmaceuticals |
| Charles River vs. ICON PLC | Charles River vs. Mettler Toledo International | Charles River vs. Laboratory of | Charles River vs. Waters |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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