Correlation Between Ideaya Biosciences and Keros Therapeutics

Can any of the company-specific risk be diversified away by investing in both Ideaya Biosciences 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 Ideaya Biosciences and Keros Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ideaya Biosciences and Keros Therapeutics, you can compare the effects of market volatilities on Ideaya Biosciences 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 Ideaya Biosciences with a short position of Keros Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ideaya Biosciences and Keros Therapeutics.

Diversification Opportunities for Ideaya Biosciences and Keros Therapeutics

0.19

Correlation Coefficient

Ideaya Biosciences  Keros Therapeutics

Average diversification

The 3 months correlation between Ideaya and Keros is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ideaya Biosciences and Keros Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros Therapeutics and Ideaya 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 Ideaya Biosciences 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 Ideaya Biosciences i.e., Ideaya Biosciences and Keros Therapeutics go up and down completely randomly.

Pair Corralation between Ideaya Biosciences and Keros Therapeutics

Given the investment horizon of 90 days Ideaya Biosciences is expected to generate 1.56 times more return on investment than Keros Therapeutics. However, Ideaya Biosciences is 1.56 times more volatile than Keros Therapeutics. It trades about 0.2 of its potential returns per unit of risk. Keros Therapeutics is currently generating about 0.06 per unit of risk. If you would invest  1,775  in Ideaya Biosciences on May 6, 2025 and sell it today you would earn a total of  725.00  from holding Ideaya Biosciences or generate 40.85% return on investment over 90 days.

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

Ideaya Biosciences  vs.  Keros Therapeutics

Ideaya Biosciences

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ideaya Biosciences are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ideaya Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

Keros Therapeutics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Keros Therapeutics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Keros Therapeutics may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ideaya Biosciences and Keros Therapeutics

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

The idea behind Ideaya Biosciences and Keros 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.