Correlation Between Keros Therapeutics and Syros Pharmaceuticals

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

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

Diversification Opportunities for Keros Therapeutics and Syros Pharmaceuticals

0.42

Correlation Coefficient

Keros Therapeutics  Syros Pharmaceuticals

Very weak diversification

The 3 months correlation between Keros and Syros is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and Syros Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syros Pharmaceuticals 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 Syros Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syros Pharmaceuticals has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and Syros Pharmaceuticals go up and down completely randomly.

Pair Corralation between Keros Therapeutics and Syros Pharmaceuticals

Given the investment horizon of 90 days Keros Therapeutics is expected to generate 0.35 times more return on investment than Syros Pharmaceuticals. However, Keros Therapeutics is 2.83 times less risky than Syros Pharmaceuticals. It trades about 0.11 of its potential returns per unit of risk. Syros Pharmaceuticals is currently generating about -0.04 per unit of risk. If you would invest  2,833  in Keros Therapeutics on September 4, 2024 and sell it today you would earn a total of  3,395  from holding Keros Therapeutics or generate 119.84% return on investment over 90 days.

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

Keros Therapeutics  vs.  Syros Pharmaceuticals

Keros Therapeutics

Risk-Adjusted Performance

8 of 100

Insignificant

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.

Syros Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Syros Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Keros Therapeutics and Syros Pharmaceuticals

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

The idea behind Keros Therapeutics and Syros 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.