Correlation Between Kymera Therapeutics and Krystal Biotech
Can any of the company-specific risk be diversified away by investing in both Kymera Therapeutics and Krystal Biotech 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 Krystal Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kymera Therapeutics and Krystal Biotech, you can compare the effects of market volatilities on Kymera Therapeutics and Krystal Biotech 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 Krystal Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kymera Therapeutics and Krystal Biotech.
Diversification Opportunities for Kymera Therapeutics and Krystal Biotech
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kymera and Krystal is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kymera Therapeutics and Krystal Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krystal Biotech 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 Krystal Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krystal Biotech has no effect on the direction of Kymera Therapeutics i.e., Kymera Therapeutics and Krystal Biotech go up and down completely randomly.
Pair Corralation between Kymera Therapeutics and Krystal Biotech
Given the investment horizon of 90 days Kymera Therapeutics is expected to generate 1.23 times more return on investment than Krystal Biotech. However, Kymera Therapeutics is 1.23 times more volatile than Krystal Biotech. It trades about 0.07 of its potential returns per unit of risk. Krystal Biotech is currently generating about 0.05 per unit of risk. If you would invest 2,275 in Kymera Therapeutics on September 1, 2024 and sell it today you would earn a total of 2,410 from holding Kymera Therapeutics or generate 105.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kymera Therapeutics vs. Krystal Biotech
Performance |
| Timeline |
| Kymera Therapeutics |
| Krystal Biotech |
Kymera Therapeutics and Krystal Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kymera Therapeutics and Krystal Biotech
The main advantage of trading using opposite Kymera Therapeutics and Krystal Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kymera Therapeutics position performs unexpectedly, Krystal Biotech 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 Krystal Biotech will offset losses from the drop in Krystal Biotech's long position.| Kymera Therapeutics vs. Foghorn Therapeutics | Kymera Therapeutics vs. Shattuck Labs | Kymera Therapeutics vs. Monte Rosa Therapeutics | Kymera Therapeutics vs. Nurix Therapeutics |
| Krystal Biotech vs. MeiraGTx Holdings PLC | Krystal Biotech vs. Apellis Pharmaceuticals | Krystal Biotech vs. Regenxbio | Krystal Biotech vs. Rhythm Pharmaceuticals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |