Correlation Between Kezar Life and Unity Biotechnology
Can any of the company-specific risk be diversified away by investing in both Kezar Life and Unity Biotechnology 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 Unity Biotechnology 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 Unity Biotechnology, you can compare the effects of market volatilities on Kezar Life and Unity Biotechnology 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 Unity Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and Unity Biotechnology.
Diversification Opportunities for Kezar Life and Unity Biotechnology
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kezar and Unity is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Unity Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Biotechnology 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 Unity Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Biotechnology has no effect on the direction of Kezar Life i.e., Kezar Life and Unity Biotechnology go up and down completely randomly.
Pair Corralation between Kezar Life and Unity Biotechnology
Considering the 90-day investment horizon Kezar Life Sciences is expected to generate 0.72 times more return on investment than Unity Biotechnology. However, Kezar Life Sciences is 1.39 times less risky than Unity Biotechnology. It trades about -0.16 of its potential returns per unit of risk. Unity Biotechnology is currently generating about -0.13 per unit of risk. If you would invest 819.00 in Kezar Life Sciences on August 31, 2024 and sell it today you would lose (72.00) from holding Kezar Life Sciences or give up 8.79% 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. Unity Biotechnology
Performance |
| Timeline |
| Kezar Life Sciences |
| Unity Biotechnology |
Kezar Life and Unity Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and Unity Biotechnology
The main advantage of trading using opposite Kezar Life and Unity Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, Unity Biotechnology 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 Unity Biotechnology will offset losses from the drop in Unity Biotechnology's long position.| Kezar Life vs. Cue Biopharma | Kezar Life vs. Eliem Therapeutics | Kezar Life vs. Inhibrx | Kezar Life vs. Molecular Partners AG |
| Unity Biotechnology vs. Cue Biopharma | Unity Biotechnology vs. Eliem Therapeutics | Unity Biotechnology vs. Inhibrx | Unity Biotechnology vs. Molecular Partners AG |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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