Correlation Between Xencor and Kezar Life
Can any of the company-specific risk be diversified away by investing in both Xencor 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 Xencor and Kezar Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xencor Inc and Kezar Life Sciences, you can compare the effects of market volatilities on Xencor 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 Xencor with a short position of Kezar Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xencor and Kezar Life.
Diversification Opportunities for Xencor and Kezar Life
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xencor and Kezar is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xencor Inc 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 Xencor 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 Xencor Inc 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 Xencor i.e., Xencor and Kezar Life go up and down completely randomly.
Pair Corralation between Xencor and Kezar Life
Given the investment horizon of 90 days Xencor Inc is expected to generate 1.43 times more return on investment than Kezar Life. However, Xencor is 1.43 times more volatile than Kezar Life Sciences. It trades about 0.49 of its potential returns per unit of risk. Kezar Life Sciences is currently generating about 0.02 per unit of risk. If you would invest 2,101 in Xencor Inc on September 1, 2024 and sell it today you would earn a total of 459.00 from holding Xencor Inc or generate 21.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xencor Inc vs. Kezar Life Sciences
Performance |
| Timeline |
| Xencor Inc |
| Kezar Life Sciences |
Xencor and Kezar Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xencor and Kezar Life
The main advantage of trading using opposite Xencor and Kezar Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xencor 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.| Xencor vs. Edgewise Therapeutics | Xencor vs. Keros Therapeutics | Xencor vs. Monte Rosa Therapeutics | Xencor vs. Mineralys Therapeutics, Common |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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