Correlation Between Kezar Life and CareMax
Can any of the company-specific risk be diversified away by investing in both Kezar Life and CareMax 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 CareMax 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 CareMax, you can compare the effects of market volatilities on Kezar Life and CareMax 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 CareMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and CareMax.
Diversification Opportunities for Kezar Life and CareMax
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kezar and CareMax is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax 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 CareMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareMax has no effect on the direction of Kezar Life i.e., Kezar Life and CareMax go up and down completely randomly.
Pair Corralation between Kezar Life and CareMax
Considering the 90-day investment horizon Kezar Life Sciences is expected to generate 0.23 times more return on investment than CareMax. However, Kezar Life Sciences is 4.31 times less risky than CareMax. It trades about 0.02 of its potential returns per unit of risk. CareMax is currently generating about -0.02 per unit of risk. If you would invest 759.00 in Kezar Life Sciences on August 25, 2024 and sell it today you would lose (9.00) from holding Kezar Life Sciences or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kezar Life Sciences vs. CareMax
Performance |
| Timeline |
| Kezar Life Sciences |
| CareMax |
Kezar Life and CareMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and CareMax
The main advantage of trading using opposite Kezar Life and CareMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, CareMax 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 CareMax will offset losses from the drop in CareMax's long position.| Kezar Life vs. Century Therapeutics | Kezar Life vs. Mineralys Therapeutics, Common | Kezar Life vs. Nkarta Inc | Kezar Life vs. Surrozen |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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