Correlation Between Kezar Life and Xencor
Can any of the company-specific risk be diversified away by investing in both Kezar Life and Xencor 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 Kezar Life and Xencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kezar Life Sciences and Xencor Inc, you can compare the effects of market volatilities on Kezar Life and Xencor 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 Kezar Life with a short position of Xencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and Xencor.
Diversification Opportunities for Kezar Life and Xencor
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kezar and Xencor is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc and Kezar Life 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 Kezar Life Sciences are associated (or correlated) with Xencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xencor Inc has no effect on the direction of Kezar Life i.e., Kezar Life and Xencor go up and down completely randomly.
Pair Corralation between Kezar Life and Xencor
Considering the 90-day investment horizon Kezar Life Sciences is expected to under-perform the Xencor. In addition to that, Kezar Life is 1.68 times more volatile than Xencor Inc. It trades about -0.05 of its total potential returns per unit of risk. Xencor Inc is currently generating about 0.02 per unit of volatility. If you would invest 2,179 in Xencor Inc on February 21, 2024 and sell it today you would earn a total of 195.00 from holding Xencor Inc or generate 8.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Kezar Life Sciences vs. Xencor Inc
Performance |
Timeline |
Kezar Life Sciences |
Xencor Inc |
Kezar Life and Xencor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kezar Life and Xencor
The main advantage of trading using opposite Kezar Life and Xencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, Xencor 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 Xencor will offset losses from the drop in Xencor's long position.Kezar Life vs. Century Therapeutics | Kezar Life vs. Mineralys Therapeutics Common | Kezar Life vs. NkartaInc | Kezar Life vs. Surrozen |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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