Correlation Between Oxford Nanopore and Keros Therapeutics
Can any of the company-specific risk be diversified away by investing in both Oxford Nanopore and Keros Therapeutics 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 Oxford Nanopore and Keros Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Nanopore Technologies and Keros Therapeutics, you can compare the effects of market volatilities on Oxford Nanopore and Keros Therapeutics 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 Oxford Nanopore with a short position of Keros Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Nanopore and Keros Therapeutics.
Diversification Opportunities for Oxford Nanopore and Keros Therapeutics
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oxford and Keros is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Nanopore Technologies and Keros Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros Therapeutics and Oxford Nanopore 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 Oxford Nanopore Technologies are associated (or correlated) with Keros Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keros Therapeutics has no effect on the direction of Oxford Nanopore i.e., Oxford Nanopore and Keros Therapeutics go up and down completely randomly.
Pair Corralation between Oxford Nanopore and Keros Therapeutics
Assuming the 90 days horizon Oxford Nanopore Technologies is expected to generate 1.89 times more return on investment than Keros Therapeutics. However, Oxford Nanopore is 1.89 times more volatile than Keros Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Keros Therapeutics is currently generating about -0.07 per unit of risk. If you would invest 191.00 in Oxford Nanopore Technologies on August 29, 2024 and sell it today you would lose (4.00) from holding Oxford Nanopore Technologies or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Nanopore Technologies vs. Keros Therapeutics
Performance |
| Timeline |
| Oxford Nanopore Tech |
| Keros Therapeutics |
Oxford Nanopore and Keros Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Nanopore and Keros Therapeutics
The main advantage of trading using opposite Oxford Nanopore and Keros Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Nanopore position performs unexpectedly, Keros Therapeutics 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 Keros Therapeutics will offset losses from the drop in Keros Therapeutics' long position.The idea behind Oxford Nanopore Technologies and Keros Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Keros Therapeutics vs. Ideaya Biosciences | Keros Therapeutics vs. AnaptysBio | Keros Therapeutics vs. MeiraGTx Holdings PLC | Keros Therapeutics vs. Janux 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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