Correlation Between Kymera Therapeutics and C4 Therapeutics
Can any of the company-specific risk be diversified away by investing in both Kymera Therapeutics and C4 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 Kymera Therapeutics and C4 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kymera Therapeutics and C4 Therapeutics, you can compare the effects of market volatilities on Kymera Therapeutics and C4 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 Kymera Therapeutics with a short position of C4 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kymera Therapeutics and C4 Therapeutics.
Diversification Opportunities for Kymera Therapeutics and C4 Therapeutics
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kymera and CCCC is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kymera Therapeutics and C4 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C4 Therapeutics and Kymera Therapeutics 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 Kymera Therapeutics are associated (or correlated) with C4 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C4 Therapeutics has no effect on the direction of Kymera Therapeutics i.e., Kymera Therapeutics and C4 Therapeutics go up and down completely randomly.
Pair Corralation between Kymera Therapeutics and C4 Therapeutics
Given the investment horizon of 90 days Kymera Therapeutics is expected to generate 0.7 times more return on investment than C4 Therapeutics. However, Kymera Therapeutics is 1.44 times less risky than C4 Therapeutics. It trades about -0.02 of its potential returns per unit of risk. C4 Therapeutics is currently generating about -0.07 per unit of risk. If you would invest 4,632 in Kymera Therapeutics on November 2, 2024 and sell it today you would lose (587.00) from holding Kymera Therapeutics or give up 12.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kymera Therapeutics vs. C4 Therapeutics
Performance |
| Timeline |
| Kymera Therapeutics |
| C4 Therapeutics |
Kymera Therapeutics and C4 Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kymera Therapeutics and C4 Therapeutics
The main advantage of trading using opposite Kymera Therapeutics and C4 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kymera Therapeutics position performs unexpectedly, C4 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 C4 Therapeutics will offset losses from the drop in C4 Therapeutics' long position.| Kymera Therapeutics vs. Foghorn Therapeutics | Kymera Therapeutics vs. Shattuck Labs | Kymera Therapeutics vs. Monte Rosa Therapeutics | Kymera Therapeutics vs. Nurix Therapeutics |
| C4 Therapeutics vs. Shattuck Labs | C4 Therapeutics vs. Prelude Therapeutics | C4 Therapeutics vs. Monte Rosa Therapeutics | C4 Therapeutics vs. Foghorn 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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