Correlation Between Kura Oncology and Gossamer Bio
Can any of the company-specific risk be diversified away by investing in both Kura Oncology and Gossamer Bio 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 Kura Oncology and Gossamer Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kura Oncology and Gossamer Bio, you can compare the effects of market volatilities on Kura Oncology and Gossamer Bio 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 Kura Oncology with a short position of Gossamer Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Oncology and Gossamer Bio.
Diversification Opportunities for Kura Oncology and Gossamer Bio
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kura and Gossamer is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kura Oncology and Gossamer Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gossamer Bio and Kura Oncology 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 Kura Oncology are associated (or correlated) with Gossamer Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gossamer Bio has no effect on the direction of Kura Oncology i.e., Kura Oncology and Gossamer Bio go up and down completely randomly.
Pair Corralation between Kura Oncology and Gossamer Bio
Given the investment horizon of 90 days Kura Oncology is expected to under-perform the Gossamer Bio. But the stock apears to be less risky and, when comparing its historical volatility, Kura Oncology is 2.37 times less risky than Gossamer Bio. The stock trades about -0.48 of its potential returns per unit of risk. The Gossamer Bio is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 84.00 in Gossamer Bio on October 20, 2024 and sell it today you would earn a total of 12.00 from holding Gossamer Bio or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kura Oncology vs. Gossamer Bio
Performance |
| Timeline |
| Kura Oncology |
| Gossamer Bio |
Kura Oncology and Gossamer Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Oncology and Gossamer Bio
The main advantage of trading using opposite Kura Oncology and Gossamer Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Oncology position performs unexpectedly, Gossamer Bio 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 Gossamer Bio will offset losses from the drop in Gossamer Bio's long position.| Kura Oncology vs. Protagonist Therapeutics | Kura Oncology vs. Merus BV | Kura Oncology vs. Replimune Group | Kura Oncology vs. Kalvista Pharmaceuticals |
| Gossamer Bio vs. Biomea Fusion | Gossamer Bio vs. Stoke Therapeutics | Gossamer Bio vs. Akero Therapeutics | Gossamer Bio vs. Replimune Group |
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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