Correlation Between Viridian Therapeutics and Kiniksa Pharmaceuticals

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

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

Diversification Opportunities for Viridian Therapeutics and Kiniksa Pharmaceuticals

0.56

Correlation Coefficient

Viridian Therapeutics  Kiniksa Pharmaceuticals

Very weak diversification

The 3 months correlation between Viridian and Kiniksa is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Viridian Therapeutics and Kiniksa Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiniksa Pharmaceuticals and Viridian 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 Viridian Therapeutics are associated (or correlated) with Kiniksa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiniksa Pharmaceuticals has no effect on the direction of Viridian Therapeutics i.e., Viridian Therapeutics and Kiniksa Pharmaceuticals go up and down completely randomly.

Pair Corralation between Viridian Therapeutics and Kiniksa Pharmaceuticals

Given the investment horizon of 90 days Viridian Therapeutics is expected to generate 1.03 times more return on investment than Kiniksa Pharmaceuticals. However, Viridian Therapeutics is 1.03 times more volatile than Kiniksa Pharmaceuticals. It trades about 0.2 of its potential returns per unit of risk. Kiniksa Pharmaceuticals is currently generating about 0.13 per unit of risk. If you would invest  1,203  in Viridian Therapeutics on May 6, 2025 and sell it today you would earn a total of  483.00  from holding Viridian Therapeutics or generate 40.15% return on investment over 90 days.

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

Viridian Therapeutics  vs.  Kiniksa Pharmaceuticals

Viridian Therapeutics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Viridian Therapeutics are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Viridian Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Kiniksa Pharmaceuticals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kiniksa Pharmaceuticals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kiniksa Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viridian Therapeutics and Kiniksa Pharmaceuticals

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

The idea behind Viridian Therapeutics and Kiniksa Pharmaceuticals 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.