Correlation Between Ocular Therapeutix and Kezar Life
Can any of the company-specific risk be diversified away by investing in both Ocular Therapeutix 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 Ocular Therapeutix and Kezar Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocular Therapeutix and Kezar Life Sciences, you can compare the effects of market volatilities on Ocular Therapeutix 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 Ocular Therapeutix with a short position of Kezar Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocular Therapeutix and Kezar Life.
Diversification Opportunities for Ocular Therapeutix and Kezar Life
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ocular and Kezar is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ocular Therapeutix 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 Ocular Therapeutix 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 Ocular Therapeutix 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 Ocular Therapeutix i.e., Ocular Therapeutix and Kezar Life go up and down completely randomly.
Pair Corralation between Ocular Therapeutix and Kezar Life
Given the investment horizon of 90 days Ocular Therapeutix is expected to under-perform the Kezar Life. But the stock apears to be less risky and, when comparing its historical volatility, Ocular Therapeutix is 1.03 times less risky than Kezar Life. The stock trades about -0.27 of its potential returns per unit of risk. The Kezar Life Sciences is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 657.00 in Kezar Life Sciences on November 3, 2024 and sell it today you would lose (9.00) from holding Kezar Life Sciences or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ocular Therapeutix vs. Kezar Life Sciences
Performance |
| Timeline |
| Ocular Therapeutix |
| Kezar Life Sciences |
Ocular Therapeutix and Kezar Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocular Therapeutix and Kezar Life
The main advantage of trading using opposite Ocular Therapeutix and Kezar Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocular Therapeutix 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.| Ocular Therapeutix vs. CytomX Therapeutics | Ocular Therapeutix vs. Assembly Biosciences | Ocular Therapeutix vs. Spero Therapeutics | Ocular Therapeutix vs. Achilles Therapeutics PLC |
| Kezar Life vs. Century Therapeutics | Kezar Life vs. Mineralys Therapeutics, Common | Kezar Life vs. Nkarta Inc | Kezar Life vs. Surrozen |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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