Correlation Between Kezar Life and Neximmune

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

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

Diversification Opportunities for Kezar Life and Neximmune

-0.44

Correlation Coefficient

Kezar Life  Neximmune

Very good diversification

The 3 months correlation between Kezar and Neximmune is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Neximmune in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neximmune and Kezar Life 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 Kezar Life Sciences are associated (or correlated) with Neximmune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neximmune has no effect on the direction of Kezar Life i.e., Kezar Life and Neximmune go up and down completely randomly.

Pair Corralation between Kezar Life and Neximmune

If you would invest  580.00  in Kezar Life Sciences on September 3, 2024 and sell it today you would earn a total of  161.00  from holding Kezar Life Sciences or generate 27.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Kezar Life Sciences  vs.  Neximmune

Kezar Life Sciences

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kezar Life Sciences are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Kezar Life reported solid returns over the last few months and may actually be approaching a breakup point.

Neximmune

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neximmune has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Neximmune is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kezar Life and Neximmune

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

The idea behind Kezar Life Sciences and Neximmune 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.