Correlation Between Generation Bio and Kymera Therapeutics

Can any of the company-specific risk be diversified away by investing in both Generation 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 Generation 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 Generation Bio Co and Kymera Therapeutics, you can compare the effects of market volatilities on Generation 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 Generation Bio with a short position of Kymera Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Bio and Kymera Therapeutics.

Diversification Opportunities for Generation Bio and Kymera Therapeutics

0.13

Correlation Coefficient

Generation Bio  Kymera Therapeutics

Average diversification

The 3 months correlation between Generation and Kymera is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Generation Bio Co and Kymera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kymera Therapeutics and Generation 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 Generation Bio Co 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 Generation Bio i.e., Generation Bio and Kymera Therapeutics go up and down completely randomly.

Pair Corralation between Generation Bio and Kymera Therapeutics

Given the investment horizon of 90 days Generation Bio is expected to generate 1.76 times less return on investment than Kymera Therapeutics. In addition to that, Generation Bio is 1.21 times more volatile than Kymera Therapeutics. It trades about 0.06 of its total potential returns per unit of risk. Kymera Therapeutics is currently generating about 0.13 per unit of volatility. If you would invest  2,857  in Kymera Therapeutics on May 6, 2025 and sell it today you would earn a total of  1,439  from holding Kymera Therapeutics or generate 50.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Generation Bio Co  vs.  Kymera Therapeutics

Generation Bio

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Generation Bio Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Generation Bio displayed solid returns over the last few months and may actually be approaching a breakup point.

Kymera Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kymera Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady primary indicators, Kymera Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Generation Bio and Kymera Therapeutics

The main advantage of trading using opposite Generation Bio and Kymera Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation 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.

The idea behind Generation Bio Co and Kymera Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.