Correlation Between Krystal Biotech and SIGA Technologies
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and SIGA Technologies 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 SIGA Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krystal Biotech and SIGA Technologies, you can compare the effects of market volatilities on Krystal Biotech and SIGA Technologies 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 SIGA Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and SIGA Technologies.
Diversification Opportunities for Krystal Biotech and SIGA Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Krystal and SIGA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and SIGA Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIGA Technologies 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 SIGA Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIGA Technologies has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and SIGA Technologies go up and down completely randomly.
Pair Corralation between Krystal Biotech and SIGA Technologies
Given the investment horizon of 90 days Krystal Biotech is expected to generate 0.86 times more return on investment than SIGA Technologies. However, Krystal Biotech is 1.17 times less risky than SIGA Technologies. It trades about 0.07 of its potential returns per unit of risk. SIGA Technologies is currently generating about 0.02 per unit of risk. If you would invest 7,440 in Krystal Biotech on August 28, 2024 and sell it today you would earn a total of 12,016 from holding Krystal Biotech or generate 161.51% 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. SIGA Technologies
Performance |
| Timeline |
| Krystal Biotech |
| SIGA Technologies |
Krystal Biotech and SIGA Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and SIGA Technologies
The main advantage of trading using opposite Krystal Biotech and SIGA Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, SIGA Technologies 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 SIGA Technologies will offset losses from the drop in SIGA Technologies' long position.| Krystal Biotech vs. Eliem Therapeutics | Krystal Biotech vs. HCW Biologics | Krystal Biotech vs. Scpharmaceuticals | Krystal Biotech vs. Milestone Pharmaceuticals |
| SIGA Technologies vs. Elanco Animal Health | SIGA Technologies vs. Esperion Therapeutics | SIGA Technologies vs. Catalent | SIGA Technologies vs. China Pharma Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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