Correlation Between Kezar Life and Collplant Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Kezar Life and Collplant Biotechnologies 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 Collplant Biotechnologies 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 Collplant Biotechnologies, you can compare the effects of market volatilities on Kezar Life and Collplant Biotechnologies 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 Collplant Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and Collplant Biotechnologies.
Diversification Opportunities for Kezar Life and Collplant Biotechnologies
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kezar and Collplant is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Collplant Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collplant Biotechnologies 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 Collplant Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collplant Biotechnologies has no effect on the direction of Kezar Life i.e., Kezar Life and Collplant Biotechnologies go up and down completely randomly.
Pair Corralation between Kezar Life and Collplant Biotechnologies
Considering the 90-day investment horizon Kezar Life Sciences is expected to under-perform the Collplant Biotechnologies. But the stock apears to be less risky and, when comparing its historical volatility, Kezar Life Sciences is 1.04 times less risky than Collplant Biotechnologies. The stock trades about -0.03 of its potential returns per unit of risk. The Collplant Biotechnologies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 390.00 in Collplant Biotechnologies on August 28, 2024 and sell it today you would earn a total of 36.00 from holding Collplant Biotechnologies or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kezar Life Sciences vs. Collplant Biotechnologies
Performance |
| Timeline |
| Kezar Life Sciences |
| Collplant Biotechnologies |
Kezar Life and Collplant Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and Collplant Biotechnologies
The main advantage of trading using opposite Kezar Life and Collplant Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, Collplant Biotechnologies 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 Collplant Biotechnologies will offset losses from the drop in Collplant Biotechnologies' long position.| Kezar Life vs. Eliem Therapeutics | Kezar Life vs. HCW Biologics | Kezar Life vs. Scpharmaceuticals | Kezar Life vs. Milestone Pharmaceuticals |
| Collplant Biotechnologies vs. Keros Therapeutics | Collplant Biotechnologies vs. Merus BV | Collplant Biotechnologies vs. Vericel Corp Ord | Collplant Biotechnologies vs. Century 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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