Correlation Between Krystal Biotech and Fortive Corp
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Fortive Corp 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 Fortive Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krystal Biotech and Fortive Corp, you can compare the effects of market volatilities on Krystal Biotech and Fortive Corp 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 Fortive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Fortive Corp.
Diversification Opportunities for Krystal Biotech and Fortive Corp
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Krystal and Fortive is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Fortive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortive 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 Fortive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortive Corp has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Fortive Corp go up and down completely randomly.
Pair Corralation between Krystal Biotech and Fortive Corp
Given the investment horizon of 90 days Krystal Biotech is expected to generate 2.51 times more return on investment than Fortive Corp. However, Krystal Biotech is 2.51 times more volatile than Fortive Corp. It trades about 0.05 of its potential returns per unit of risk. Fortive Corp is currently generating about 0.03 per unit of risk. If you would invest 8,021 in Krystal Biotech on October 25, 2024 and sell it today you would earn a total of 7,485 from holding Krystal Biotech or generate 93.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krystal Biotech vs. Fortive Corp
Performance |
| Timeline |
| Krystal Biotech |
| Fortive Corp |
Krystal Biotech and Fortive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and Fortive Corp
The main advantage of trading using opposite Krystal Biotech and Fortive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Fortive Corp 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 Fortive Corp will offset losses from the drop in Fortive Corp's long position.| Krystal Biotech vs. Surrozen | Krystal Biotech vs. Armata Pharmaceuticals | Krystal Biotech vs. Pasithea Therapeutics Corp | Krystal Biotech vs. Aditxt Inc |
| Fortive Corp vs. Vishay Precision Group | Fortive Corp vs. Sensata Technologies Holding | Fortive Corp vs. Badger Meter | Fortive Corp vs. Trimble |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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