Correlation Between Krystal Biotech and Intercept Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Intercept 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 Intercept 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 Intercept Pharmaceuticals, you can compare the effects of market volatilities on Krystal Biotech and Intercept 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 Intercept Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Intercept Pharmaceuticals.
Diversification Opportunities for Krystal Biotech and Intercept Pharmaceuticals
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Krystal and Intercept is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Intercept Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercept 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 Intercept Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercept Pharmaceuticals has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Intercept Pharmaceuticals go up and down completely randomly.
Pair Corralation between Krystal Biotech and Intercept Pharmaceuticals
If you would invest 1,031 in Intercept Pharmaceuticals on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Intercept Pharmaceuticals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Krystal Biotech vs. Intercept Pharmaceuticals
Performance |
| Timeline |
| Krystal Biotech |
| Intercept Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Krystal Biotech and Intercept Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and Intercept Pharmaceuticals
The main advantage of trading using opposite Krystal Biotech and Intercept Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Intercept 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 Intercept Pharmaceuticals will offset losses from the drop in Intercept Pharmaceuticals' long position.| Krystal Biotech vs. Eliem Therapeutics | Krystal Biotech vs. HCW Biologics | Krystal Biotech vs. Scpharmaceuticals | Krystal Biotech 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |