Correlation Between Seres Therapeutics and Kronos Bio
Can any of the company-specific risk be diversified away by investing in both Seres Therapeutics and Kronos Bio 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 Seres Therapeutics and Kronos Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seres Therapeutics and Kronos Bio, you can compare the effects of market volatilities on Seres Therapeutics and Kronos Bio 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 Seres Therapeutics with a short position of Kronos Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seres Therapeutics and Kronos Bio.
Diversification Opportunities for Seres Therapeutics and Kronos Bio
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seres and Kronos is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and Kronos Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Bio and Seres Therapeutics 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 Seres Therapeutics are associated (or correlated) with Kronos Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Bio has no effect on the direction of Seres Therapeutics i.e., Seres Therapeutics and Kronos Bio go up and down completely randomly.
Pair Corralation between Seres Therapeutics and Kronos Bio
Given the investment horizon of 90 days Seres Therapeutics is expected to generate 1.41 times more return on investment than Kronos Bio. However, Seres Therapeutics is 1.41 times more volatile than Kronos Bio. It trades about 0.03 of its potential returns per unit of risk. Kronos Bio is currently generating about 0.04 per unit of risk. If you would invest 100.00 in Seres Therapeutics on August 29, 2024 and sell it today you would lose (12.00) from holding Seres Therapeutics or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seres Therapeutics vs. Kronos Bio
Performance |
| Timeline |
| Seres Therapeutics |
| Kronos Bio |
Seres Therapeutics and Kronos Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seres Therapeutics and Kronos Bio
The main advantage of trading using opposite Seres Therapeutics and Kronos Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seres Therapeutics position performs unexpectedly, Kronos Bio 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 Kronos Bio will offset losses from the drop in Kronos Bio's long position.| Seres Therapeutics vs. Syros Pharmaceuticals | Seres Therapeutics vs. Iovance Biotherapeutics | Seres Therapeutics vs. Veracyte | Seres Therapeutics vs. Fate Therapeutics |
| Kronos Bio vs. Eliem Therapeutics | Kronos Bio vs. Scpharmaceuticals | Kronos Bio vs. Milestone Pharmaceuticals | Kronos Bio vs. Seres 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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