Correlation Between Kymera Therapeutics and Monte Rosa

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

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

Diversification Opportunities for Kymera Therapeutics and Monte Rosa

0.25

Correlation Coefficient

Kymera Therapeutics  Monte Rosa

Modest diversification

The 3 months correlation between Kymera and Monte is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kymera Therapeutics and Monte Rosa Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monte Rosa Therapeutics and Kymera 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 Kymera Therapeutics are associated (or correlated) with Monte Rosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monte Rosa Therapeutics has no effect on the direction of Kymera Therapeutics i.e., Kymera Therapeutics and Monte Rosa go up and down completely randomly.

Pair Corralation between Kymera Therapeutics and Monte Rosa

Given the investment horizon of 90 days Kymera Therapeutics is expected to under-perform the Monte Rosa. But the stock apears to be less risky and, when comparing its historical volatility, Kymera Therapeutics is 1.23 times less risky than Monte Rosa. The stock trades about -0.08 of its potential returns per unit of risk. The Monte Rosa Therapeutics is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  722.00  in Monte Rosa Therapeutics on December 25, 2024 and sell it today you would lose (139.00) from holding Monte Rosa Therapeutics or give up 19.25% of portfolio value over 90 days.

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

Kymera Therapeutics  vs.  Monte Rosa Therapeutics

Kymera Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kymera Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Monte Rosa Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monte Rosa Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Kymera Therapeutics and Monte Rosa

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

The idea behind Kymera Therapeutics and Monte Rosa 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.