Correlation Between Krystal Biotech and Prometheus Biosciences
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Prometheus Biosciences 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 Prometheus Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krystal Biotech and Prometheus Biosciences, you can compare the effects of market volatilities on Krystal Biotech and Prometheus Biosciences 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 Prometheus Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Prometheus Biosciences.
Diversification Opportunities for Krystal Biotech and Prometheus Biosciences
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Krystal and Prometheus is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Prometheus Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prometheus Biosciences 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 Prometheus Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prometheus Biosciences has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Prometheus Biosciences go up and down completely randomly.
Pair Corralation between Krystal Biotech and Prometheus Biosciences
If you would invest 17,689 in Krystal Biotech on August 28, 2024 and sell it today you would earn a total of 1,767 from holding Krystal Biotech or generate 9.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Krystal Biotech vs. Prometheus Biosciences
Performance |
| Timeline |
| Krystal Biotech |
| Prometheus Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Krystal Biotech and Prometheus Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and Prometheus Biosciences
The main advantage of trading using opposite Krystal Biotech and Prometheus Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Prometheus Biosciences 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 Prometheus Biosciences will offset losses from the drop in Prometheus Biosciences' long position.| Krystal Biotech vs. Eliem Therapeutics | Krystal Biotech vs. HCW Biologics | Krystal Biotech vs. Scpharmaceuticals | Krystal Biotech vs. Milestone Pharmaceuticals |
| Prometheus Biosciences vs. Apellis Pharmaceuticals | Prometheus Biosciences vs. Akero Therapeutics | Prometheus Biosciences vs. Immunovant | Prometheus Biosciences vs. Madrigal 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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