Correlation Between Krystal Biotech and Elicio Therapeutics
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Elicio 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 Krystal Biotech and Elicio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krystal Biotech and Elicio Therapeutics, you can compare the effects of market volatilities on Krystal Biotech and Elicio 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 Krystal Biotech with a short position of Elicio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Elicio Therapeutics.
Diversification Opportunities for Krystal Biotech and Elicio Therapeutics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Krystal and Elicio is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Elicio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elicio Therapeutics 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 Elicio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elicio Therapeutics has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Elicio Therapeutics go up and down completely randomly.
Pair Corralation between Krystal Biotech and Elicio Therapeutics
Given the investment horizon of 90 days Krystal Biotech is expected to generate 1.44 times less return on investment than Elicio Therapeutics. But when comparing it to its historical volatility, Krystal Biotech is 1.26 times less risky than Elicio Therapeutics. It trades about 0.18 of its potential returns per unit of risk. Elicio Therapeutics is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 431.00 in Elicio Therapeutics on August 30, 2024 and sell it today you would earn a total of 74.00 from holding Elicio Therapeutics or generate 17.17% 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. Elicio Therapeutics
Performance |
| Timeline |
| Krystal Biotech |
| Elicio Therapeutics |
Krystal Biotech and Elicio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and Elicio Therapeutics
The main advantage of trading using opposite Krystal Biotech and Elicio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Elicio 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 Elicio Therapeutics will offset losses from the drop in Elicio Therapeutics' long position.| Krystal Biotech vs. MeiraGTx Holdings PLC | Krystal Biotech vs. Apellis Pharmaceuticals | Krystal Biotech vs. Regenxbio | Krystal Biotech vs. Rhythm Pharmaceuticals |
| Elicio Therapeutics vs. Sea | Elicio Therapeutics vs. The Cheesecake Factory | Elicio Therapeutics vs. Titan Machinery | Elicio Therapeutics vs. Fast Retailing Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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