Correlation Between Kezar Life and Lexaria Bioscience
Can any of the company-specific risk be diversified away by investing in both Kezar Life and Lexaria Bioscience 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 Lexaria Bioscience 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 Lexaria Bioscience Corp, you can compare the effects of market volatilities on Kezar Life and Lexaria Bioscience 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 Lexaria Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and Lexaria Bioscience.
Diversification Opportunities for Kezar Life and Lexaria Bioscience
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kezar and Lexaria is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Lexaria Bioscience Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexaria Bioscience Corp 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 Lexaria Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexaria Bioscience Corp has no effect on the direction of Kezar Life i.e., Kezar Life and Lexaria Bioscience go up and down completely randomly.
Pair Corralation between Kezar Life and Lexaria Bioscience
Considering the 90-day investment horizon Kezar Life is expected to generate 50.17 times less return on investment than Lexaria Bioscience. But when comparing it to its historical volatility, Kezar Life Sciences is 6.9 times less risky than Lexaria Bioscience. It trades about 0.02 of its potential returns per unit of risk. Lexaria Bioscience Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Lexaria Bioscience Corp on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Lexaria Bioscience Corp or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Kezar Life Sciences vs. Lexaria Bioscience Corp
Performance |
| Timeline |
| Kezar Life Sciences |
| Lexaria Bioscience Corp |
Kezar Life and Lexaria Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and Lexaria Bioscience
The main advantage of trading using opposite Kezar Life and Lexaria Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, Lexaria Bioscience 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 Lexaria Bioscience will offset losses from the drop in Lexaria Bioscience's long position.| Kezar Life vs. Century Therapeutics | Kezar Life vs. Mineralys Therapeutics, Common | Kezar Life vs. Nkarta Inc | Kezar Life vs. Surrozen |
| Lexaria Bioscience vs. Lexaria Bioscience Corp | Lexaria Bioscience vs. Lixte Biotechnology Holdings | Lexaria Bioscience vs. GeoVax Labs | Lexaria Bioscience vs. Reviva Pharmaceuticals Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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