Correlation Between Revolution Medicines and Keros Therapeutics
Can any of the company-specific risk be diversified away by investing in both Revolution Medicines 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 Revolution Medicines and Keros Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Revolution Medicines and Keros Therapeutics, you can compare the effects of market volatilities on Revolution Medicines 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 Revolution Medicines with a short position of Keros Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revolution Medicines and Keros Therapeutics.
Diversification Opportunities for Revolution Medicines and Keros Therapeutics
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Revolution and Keros is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Revolution Medicines and Keros Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros Therapeutics and Revolution Medicines 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 Revolution Medicines 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 Revolution Medicines i.e., Revolution Medicines and Keros Therapeutics go up and down completely randomly.
Pair Corralation between Revolution Medicines and Keros Therapeutics
Given the investment horizon of 90 days Revolution Medicines is expected to generate 0.89 times more return on investment than Keros Therapeutics. However, Revolution Medicines is 1.12 times less risky than Keros Therapeutics. It trades about 0.27 of its potential returns per unit of risk. Keros Therapeutics is currently generating about -0.09 per unit of risk. If you would invest 4,851 in Revolution Medicines on August 24, 2024 and sell it today you would earn a total of 827.00 from holding Revolution Medicines or generate 17.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Revolution Medicines vs. Keros Therapeutics
Performance |
| Timeline |
| Revolution Medicines |
| Keros Therapeutics |
Revolution Medicines and Keros Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Revolution Medicines and Keros Therapeutics
The main advantage of trading using opposite Revolution Medicines and Keros Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revolution Medicines 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.| Revolution Medicines vs. Lyra Therapeutics | Revolution Medicines vs. Hookipa Pharma | Revolution Medicines vs. Cingulate Warrants | Revolution Medicines vs. SAB Biotherapeutics |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |