Correlation Between Kezar Life and Kymera Therapeutics
Can any of the company-specific risk be diversified away by investing in both Kezar Life and Kymera Therapeutics 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 Kymera Therapeutics 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 Kymera Therapeutics, you can compare the effects of market volatilities on Kezar Life and Kymera Therapeutics 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 Kymera Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and Kymera Therapeutics.
Diversification Opportunities for Kezar Life and Kymera Therapeutics
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kezar and Kymera is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Kymera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kymera Therapeutics 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 Kymera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kymera Therapeutics has no effect on the direction of Kezar Life i.e., Kezar Life and Kymera Therapeutics go up and down completely randomly.
Pair Corralation between Kezar Life and Kymera Therapeutics
Considering the 90-day investment horizon Kezar Life Sciences is expected to under-perform the Kymera Therapeutics. In addition to that, Kezar Life is 1.03 times more volatile than Kymera Therapeutics. It trades about -0.06 of its total potential returns per unit of risk. Kymera Therapeutics is currently generating about 0.01 per unit of volatility. If you would invest 3,309 in Kymera Therapeutics on January 13, 2025 and sell it today you would lose (897.00) from holding Kymera Therapeutics or give up 27.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kezar Life Sciences vs. Kymera Therapeutics
Performance |
| Timeline |
| Kezar Life Sciences |
| Kymera Therapeutics |
Kezar Life and Kymera Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and Kymera Therapeutics
The main advantage of trading using opposite Kezar Life and Kymera Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, Kymera Therapeutics 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 Kymera Therapeutics will offset losses from the drop in Kymera Therapeutics' long position.| Kezar Life vs. Century Therapeutics | Kezar Life vs. Mineralys Therapeutics, Common | Kezar Life vs. Nkarta Inc | Kezar Life vs. Surrozen |
| Kymera Therapeutics vs. Foghorn Therapeutics | Kymera Therapeutics vs. Shattuck Labs | Kymera Therapeutics vs. Monte Rosa Therapeutics | Kymera Therapeutics vs. Nurix 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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