Correlation Between Kezar Life and Shattuck Labs
Can any of the company-specific risk be diversified away by investing in both Kezar Life and Shattuck Labs 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 Shattuck Labs 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 Shattuck Labs, you can compare the effects of market volatilities on Kezar Life and Shattuck Labs 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 Shattuck Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and Shattuck Labs.
Diversification Opportunities for Kezar Life and Shattuck Labs
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kezar and Shattuck is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Shattuck Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shattuck Labs 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 Shattuck Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shattuck Labs has no effect on the direction of Kezar Life i.e., Kezar Life and Shattuck Labs go up and down completely randomly.
Pair Corralation between Kezar Life and Shattuck Labs
Considering the 90-day investment horizon Kezar Life Sciences is expected to under-perform the Shattuck Labs. But the stock apears to be less risky and, when comparing its historical volatility, Kezar Life Sciences is 1.8 times less risky than Shattuck Labs. The stock trades about -0.07 of its potential returns per unit of risk. The Shattuck Labs is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Shattuck Labs on August 27, 2024 and sell it today you would lose (130.00) from holding Shattuck Labs or give up 56.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kezar Life Sciences vs. Shattuck Labs
Performance |
| Timeline |
| Kezar Life Sciences |
| Shattuck Labs |
Kezar Life and Shattuck Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and Shattuck Labs
The main advantage of trading using opposite Kezar Life and Shattuck Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, Shattuck Labs 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 Shattuck Labs will offset losses from the drop in Shattuck Labs' long position.| Kezar Life vs. Eliem Therapeutics | Kezar Life vs. HCW Biologics | Kezar Life vs. Scpharmaceuticals | Kezar Life vs. Milestone Pharmaceuticals |
| Shattuck Labs vs. C4 Therapeutics | Shattuck Labs vs. Eliem Therapeutics | Shattuck Labs vs. Prelude Therapeutics | Shattuck Labs vs. Monte Rosa 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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