Correlation Between Prometheus Biosciences and Krystal Biotech
Can any of the company-specific risk be diversified away by investing in both Prometheus Biosciences and Krystal Biotech 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 Prometheus Biosciences and Krystal Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prometheus Biosciences and Krystal Biotech, you can compare the effects of market volatilities on Prometheus Biosciences and Krystal Biotech 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 Prometheus Biosciences with a short position of Krystal Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prometheus Biosciences and Krystal Biotech.
Diversification Opportunities for Prometheus Biosciences and Krystal Biotech
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prometheus and Krystal is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Prometheus Biosciences and Krystal Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krystal Biotech and Prometheus Biosciences 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 Prometheus Biosciences are associated (or correlated) with Krystal Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krystal Biotech has no effect on the direction of Prometheus Biosciences i.e., Prometheus Biosciences and Krystal Biotech go up and down completely randomly.
Pair Corralation between Prometheus Biosciences and Krystal Biotech
Given the investment horizon of 90 days Prometheus Biosciences is expected to generate 2.22 times more return on investment than Krystal Biotech. However, Prometheus Biosciences is 2.22 times more volatile than Krystal Biotech. It trades about 0.11 of its potential returns per unit of risk. Krystal Biotech is currently generating about 0.06 per unit of risk. If you would invest 11,751 in Prometheus Biosciences on November 1, 2024 and sell it today you would earn a total of 8,241 from holding Prometheus Biosciences or generate 70.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 17.81% |
| Values | Daily Returns |
Prometheus Biosciences vs. Krystal Biotech
Performance |
| Timeline |
| Prometheus Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Krystal Biotech |
Prometheus Biosciences and Krystal Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prometheus Biosciences and Krystal Biotech
The main advantage of trading using opposite Prometheus Biosciences and Krystal Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prometheus Biosciences position performs unexpectedly, Krystal Biotech 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 Krystal Biotech will offset losses from the drop in Krystal Biotech's long position.| Prometheus Biosciences vs. Apellis Pharmaceuticals | Prometheus Biosciences vs. Akero Therapeutics | Prometheus Biosciences vs. Immunovant | Prometheus Biosciences vs. Madrigal Pharmaceuticals |
| Krystal Biotech vs. MeiraGTx Holdings PLC | Krystal Biotech vs. Apellis Pharmaceuticals | Krystal Biotech vs. Regenxbio | Krystal Biotech vs. Rhythm Pharmaceuticals |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |