Correlation Between Krystal Biotech and Vir Biotechnology
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Vir Biotechnology 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 Vir Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krystal Biotech and Vir Biotechnology, you can compare the effects of market volatilities on Krystal Biotech and Vir Biotechnology 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 Vir Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Vir Biotechnology.
Diversification Opportunities for Krystal Biotech and Vir Biotechnology
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Krystal and Vir is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Vir Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vir Biotechnology 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 Vir Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vir Biotechnology has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Vir Biotechnology go up and down completely randomly.
Pair Corralation between Krystal Biotech and Vir Biotechnology
Given the investment horizon of 90 days Krystal Biotech is expected to generate 0.58 times more return on investment than Vir Biotechnology. However, Krystal Biotech is 1.73 times less risky than Vir Biotechnology. It trades about 0.07 of its potential returns per unit of risk. Vir Biotechnology is currently generating about -0.04 per unit of risk. If you would invest 16,426 in Krystal Biotech on August 30, 2024 and sell it today you would earn a total of 3,265 from holding Krystal Biotech or generate 19.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krystal Biotech vs. Vir Biotechnology
Performance |
| Timeline |
| Krystal Biotech |
| Vir Biotechnology |
Krystal Biotech and Vir Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and Vir Biotechnology
The main advantage of trading using opposite Krystal Biotech and Vir Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Vir Biotechnology 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 Vir Biotechnology will offset losses from the drop in Vir Biotechnology's long position.| Krystal Biotech vs. MeiraGTx Holdings PLC | Krystal Biotech vs. Apellis Pharmaceuticals | Krystal Biotech vs. Regenxbio | Krystal Biotech vs. Rhythm Pharmaceuticals |
| Vir Biotechnology vs. CureVac NV | Vir Biotechnology vs. Krystal Biotech | Vir Biotechnology vs. Propanc Biopharma | Vir Biotechnology vs. Blueprint Medicines Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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