Correlation Between Krystal Biotech and Intellia Therapeutics

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

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

Diversification Opportunities for Krystal Biotech and Intellia Therapeutics

0.48

Correlation Coefficient

Krystal Biotech  Intellia Therapeutics

Very weak diversification

The 3 months correlation between Krystal and Intellia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Intellia Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellia Therapeutics and Krystal Biotech 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 Krystal Biotech are associated (or correlated) with Intellia Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellia Therapeutics has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Intellia Therapeutics go up and down completely randomly.

Pair Corralation between Krystal Biotech and Intellia Therapeutics

Given the investment horizon of 90 days Krystal Biotech is expected to generate 58.24 times less return on investment than Intellia Therapeutics. But when comparing it to its historical volatility, Krystal Biotech is 2.04 times less risky than Intellia Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Intellia Therapeutics is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  729.00  in Intellia Therapeutics on May 7, 2025 and sell it today you would earn a total of  483.00  from holding Intellia Therapeutics or generate 66.26% return on investment over 90 days.

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

Krystal Biotech  vs.  Intellia Therapeutics

Krystal Biotech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Krystal Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Krystal Biotech is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Intellia Therapeutics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intellia Therapeutics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Intellia Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Krystal Biotech and Intellia Therapeutics

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

The idea behind Krystal Biotech and Intellia 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.