Correlation Between Kezar Life and Bolt Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Kezar Life and Bolt Biotherapeutics 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 Kezar Life and Bolt Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kezar Life Sciences and Bolt Biotherapeutics, you can compare the effects of market volatilities on Kezar Life and Bolt Biotherapeutics 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 Kezar Life with a short position of Bolt Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and Bolt Biotherapeutics.
Diversification Opportunities for Kezar Life and Bolt Biotherapeutics
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kezar and Bolt is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Bolt Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolt Biotherapeutics and Kezar Life 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 Kezar Life Sciences are associated (or correlated) with Bolt Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolt Biotherapeutics has no effect on the direction of Kezar Life i.e., Kezar Life and Bolt Biotherapeutics go up and down completely randomly.
Pair Corralation between Kezar Life and Bolt Biotherapeutics
Considering the 90-day investment horizon Kezar Life is expected to generate 5.16 times less return on investment than Bolt Biotherapeutics. But when comparing it to its historical volatility, Kezar Life Sciences is 2.02 times less risky than Bolt Biotherapeutics. It trades about 0.02 of its potential returns per unit of risk. Bolt Biotherapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 63.00 in Bolt Biotherapeutics on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Bolt Biotherapeutics or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kezar Life Sciences vs. Bolt Biotherapeutics
Performance |
| Timeline |
| Kezar Life Sciences |
| Bolt Biotherapeutics |
Kezar Life and Bolt Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and Bolt Biotherapeutics
The main advantage of trading using opposite Kezar Life and Bolt Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, Bolt Biotherapeutics 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 Bolt Biotherapeutics will offset losses from the drop in Bolt Biotherapeutics' long position.| Kezar Life vs. Century Therapeutics | Kezar Life vs. Mineralys Therapeutics, Common | Kezar Life vs. Nkarta Inc | Kezar Life vs. Surrozen |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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