Correlation Between Cingulate Warrants and Keros Therapeutics

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

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

Diversification Opportunities for Cingulate Warrants and Keros Therapeutics

-0.43

Correlation Coefficient

Cingulate Warrants  Keros Therapeutics

Very good diversification

The 3 months correlation between Cingulate and Keros is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cingulate Warrants and Keros Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros Therapeutics and Cingulate Warrants 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 Cingulate Warrants 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 Cingulate Warrants i.e., Cingulate Warrants and Keros Therapeutics go up and down completely randomly.

Pair Corralation between Cingulate Warrants and Keros Therapeutics

Assuming the 90 days horizon Cingulate Warrants is expected to generate 95.97 times less return on investment than Keros Therapeutics. In addition to that, Cingulate Warrants is 4.92 times more volatile than Keros Therapeutics. It trades about 0.0 of its total potential returns per unit of risk. Keros Therapeutics is currently generating about 0.11 per unit of volatility. If you would invest  5,698  in Keros Therapeutics on September 13, 2024 and sell it today you would earn a total of  1,167  from holding Keros Therapeutics or generate 20.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Cingulate Warrants  vs.  Keros Therapeutics

Cingulate Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cingulate Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Cingulate Warrants is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Keros Therapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Keros Therapeutics are ranked lower than 8 (%) 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.

Pair Trading with Cingulate Warrants and Keros Therapeutics

The main advantage of trading using opposite Cingulate Warrants and Keros Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cingulate Warrants 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 Cingulate Warrants 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 Anywhere module to track or share privately all of your investments from the convenience of any device.