Correlation Between Kezar Life and INC Research
Can any of the company-specific risk be diversified away by investing in both Kezar Life and INC Research 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 INC Research 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 INC Research Holdings, you can compare the effects of market volatilities on Kezar Life and INC Research 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 INC Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and INC Research.
Diversification Opportunities for Kezar Life and INC Research
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kezar and INC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and INC Research Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INC Research Holdings 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 INC Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INC Research Holdings has no effect on the direction of Kezar Life i.e., Kezar Life and INC Research go up and down completely randomly.
Pair Corralation between Kezar Life and INC Research
Considering the 90-day investment horizon Kezar Life Sciences is expected to generate 0.52 times more return on investment than INC Research. However, Kezar Life Sciences is 1.93 times less risky than INC Research. It trades about -0.06 of its potential returns per unit of risk. INC Research Holdings is currently generating about -0.17 per unit of risk. If you would invest 803.00 in Kezar Life Sciences on August 24, 2024 and sell it today you would lose (41.00) from holding Kezar Life Sciences or give up 5.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kezar Life Sciences vs. INC Research Holdings
Performance |
| Timeline |
| Kezar Life Sciences |
| INC Research Holdings |
Kezar Life and INC Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and INC Research
The main advantage of trading using opposite Kezar Life and INC Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, INC Research 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 INC Research will offset losses from the drop in INC Research's long position.| Kezar Life vs. Lyra Therapeutics | Kezar Life vs. Hookipa Pharma | Kezar Life vs. Cingulate Warrants | Kezar Life vs. SAB Biotherapeutics |
| INC Research vs. AYR Strategies Class | INC Research vs. Verano Holdings Corp | INC Research vs. TILT Holdings | INC Research vs. Lowell Farms |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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