Correlation Between Kymera Therapeutics and Milestone Pharmaceuticals

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

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

Diversification Opportunities for Kymera Therapeutics and Milestone Pharmaceuticals

-0.18

Correlation Coefficient

Kymera Therapeutics  Milestone Pharmaceuticals

Good diversification

The 3 months correlation between Kymera and Milestone is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kymera Therapeutics and Milestone Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Pharmaceuticals 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 Milestone Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milestone Pharmaceuticals has no effect on the direction of Kymera Therapeutics i.e., Kymera Therapeutics and Milestone Pharmaceuticals go up and down completely randomly.

Pair Corralation between Kymera Therapeutics and Milestone Pharmaceuticals

Given the investment horizon of 90 days Kymera Therapeutics is expected to under-perform the Milestone Pharmaceuticals. In addition to that, Kymera Therapeutics is 1.09 times more volatile than Milestone Pharmaceuticals. It trades about -0.15 of its total potential returns per unit of risk. Milestone Pharmaceuticals is currently generating about -0.07 per unit of volatility. If you would invest  200.00  in Milestone Pharmaceuticals on December 1, 2024 and sell it today you would lose (37.00) from holding Milestone Pharmaceuticals or give up 18.5% of portfolio value over 90 days.

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

Kymera Therapeutics  vs.  Milestone Pharmaceuticals

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.

Milestone Pharmaceuticals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kymera Therapeutics and Milestone Pharmaceuticals

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

The idea behind Kymera Therapeutics and Milestone 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 Stocks Directory module to find actively traded stocks across global markets.