Correlation Between Krystal Biotech and Viking Therapeutics
Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Viking Therapeutics 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 Viking Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krystal Biotech and Viking Therapeutics, you can compare the effects of market volatilities on Krystal Biotech and Viking Therapeutics 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 Viking Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Viking Therapeutics.
Diversification Opportunities for Krystal Biotech and Viking Therapeutics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Krystal and Viking is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Viking Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Therapeutics 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 Viking Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Therapeutics has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Viking Therapeutics go up and down completely randomly.
Pair Corralation between Krystal Biotech and Viking Therapeutics
Given the investment horizon of 90 days Krystal Biotech is expected to generate 0.43 times more return on investment than Viking Therapeutics. However, Krystal Biotech is 2.33 times less risky than Viking Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Viking Therapeutics is currently generating about -0.07 per unit of risk. If you would invest 17,275 in Krystal Biotech on August 24, 2024 and sell it today you would earn a total of 1,385 from holding Krystal Biotech or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krystal Biotech vs. Viking Therapeutics
Performance |
| Timeline |
| Krystal Biotech |
| Viking Therapeutics |
Krystal Biotech and Viking Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krystal Biotech and Viking Therapeutics
The main advantage of trading using opposite Krystal Biotech and Viking Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Viking Therapeutics 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 Viking Therapeutics will offset losses from the drop in Viking Therapeutics' long position.| Krystal Biotech vs. MeiraGTx Holdings PLC | Krystal Biotech vs. Apellis Pharmaceuticals | Krystal Biotech vs. Regenxbio | Krystal Biotech vs. Rhythm Pharmaceuticals |
| Viking Therapeutics vs. Terns Pharmaceuticals | Viking Therapeutics vs. Akero Therapeutics | Viking Therapeutics vs. Madrigal Pharmaceuticals | Viking Therapeutics vs. Sarepta Therapeutics |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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