Correlation Between Keros Therapeutics and Cullinan Oncology

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

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

Diversification Opportunities for Keros Therapeutics and Cullinan Oncology

-0.36

Correlation Coefficient

Keros Therapeutics  Cullinan Oncology

Very good diversification

The 3 months correlation between Keros and Cullinan is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and Cullinan Oncology LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullinan Oncology LLC and Keros Therapeutics 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 Keros Therapeutics are associated (or correlated) with Cullinan Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullinan Oncology LLC has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and Cullinan Oncology go up and down completely randomly.

Pair Corralation between Keros Therapeutics and Cullinan Oncology

Given the investment horizon of 90 days Keros Therapeutics is expected to generate 0.82 times more return on investment than Cullinan Oncology. However, Keros Therapeutics is 1.22 times less risky than Cullinan Oncology. It trades about 0.14 of its potential returns per unit of risk. Cullinan Oncology LLC is currently generating about -0.04 per unit of risk. If you would invest  4,857  in Keros Therapeutics on July 21, 2024 and sell it today you would earn a total of  1,268  from holding Keros Therapeutics or generate 26.11% return on investment over 90 days.

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

Keros Therapeutics  vs.  Cullinan Oncology LLC

Keros Therapeutics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Keros Therapeutics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Keros Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cullinan Oncology LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cullinan Oncology LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Keros Therapeutics and Cullinan Oncology

The main advantage of trading using opposite Keros Therapeutics and Cullinan Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, Cullinan Oncology 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 Cullinan Oncology will offset losses from the drop in Cullinan Oncology's long position.

The idea behind Keros Therapeutics and Cullinan Oncology LLC 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.