Correlation Between Ocean Biomedical and Kezar Life
Can any of the company-specific risk be diversified away by investing in both Ocean Biomedical and Kezar Life 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 Ocean Biomedical and Kezar Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Biomedical and Kezar Life Sciences, you can compare the effects of market volatilities on Ocean Biomedical and Kezar Life 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 Ocean Biomedical with a short position of Kezar Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Biomedical and Kezar Life.
Diversification Opportunities for Ocean Biomedical and Kezar Life
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ocean and Kezar is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Biomedical and Kezar Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kezar Life Sciences and Ocean Biomedical 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 Ocean Biomedical are associated (or correlated) with Kezar Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kezar Life Sciences has no effect on the direction of Ocean Biomedical i.e., Ocean Biomedical and Kezar Life go up and down completely randomly.
Pair Corralation between Ocean Biomedical and Kezar Life
Given the investment horizon of 90 days Ocean Biomedical is expected to under-perform the Kezar Life. But the stock apears to be less risky and, when comparing its historical volatility, Ocean Biomedical is 1.47 times less risky than Kezar Life. The stock trades about -0.12 of its potential returns per unit of risk. The Kezar Life Sciences is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 580.00 in Kezar Life Sciences on August 31, 2024 and sell it today you would earn a total of 160.00 from holding Kezar Life Sciences or generate 27.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Biomedical vs. Kezar Life Sciences
Performance |
| Timeline |
| Ocean Biomedical |
| Kezar Life Sciences |
Ocean Biomedical and Kezar Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Biomedical and Kezar Life
The main advantage of trading using opposite Ocean Biomedical and Kezar Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Biomedical position performs unexpectedly, Kezar Life 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 Kezar Life will offset losses from the drop in Kezar Life's long position.| Ocean Biomedical vs. Enveric Biosciences | Ocean Biomedical vs. Hepion Pharmaceuticals | Ocean Biomedical vs. Elevation Oncology | Ocean Biomedical vs. Zura Bio Limited |
| Kezar Life vs. In8bio Inc | Kezar Life vs. Cue Biopharma | Kezar Life vs. Tff Pharmaceuticals | Kezar Life vs. Lantern Pharma |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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