Correlation Between Passage Bio and Kymera Therapeutics
Can any of the company-specific risk be diversified away by investing in both Passage Bio and Kymera 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 Passage Bio and Kymera Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Passage Bio and Kymera Therapeutics, you can compare the effects of market volatilities on Passage Bio and Kymera 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 Passage Bio with a short position of Kymera Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Passage Bio and Kymera Therapeutics.
Diversification Opportunities for Passage Bio and Kymera Therapeutics
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Passage and Kymera is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Passage Bio and Kymera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kymera Therapeutics and Passage Bio 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 Passage Bio are associated (or correlated) with Kymera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kymera Therapeutics has no effect on the direction of Passage Bio i.e., Passage Bio and Kymera Therapeutics go up and down completely randomly.
Pair Corralation between Passage Bio and Kymera Therapeutics
Given the investment horizon of 90 days Passage Bio is expected to generate 2.8 times more return on investment than Kymera Therapeutics. However, Passage Bio is 2.8 times more volatile than Kymera Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Kymera Therapeutics is currently generating about -0.01 per unit of risk. If you would invest 62.00 in Passage Bio on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Passage Bio or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Passage Bio vs. Kymera Therapeutics
Performance |
| Timeline |
| Passage Bio |
| Kymera Therapeutics |
Passage Bio and Kymera Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Passage Bio and Kymera Therapeutics
The main advantage of trading using opposite Passage Bio and Kymera Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Passage Bio position performs unexpectedly, Kymera 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 Kymera Therapeutics will offset losses from the drop in Kymera Therapeutics' long position.| Passage Bio vs. Cue Biopharma | Passage Bio vs. Eliem Therapeutics | Passage Bio vs. Inhibrx | Passage Bio vs. Molecular Partners AG |
| Kymera Therapeutics vs. Foghorn Therapeutics | Kymera Therapeutics vs. Shattuck Labs | Kymera Therapeutics vs. Monte Rosa Therapeutics | Kymera Therapeutics vs. Nurix 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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