Correlation Between Kezar Life and Surrozen

Can any of the company-specific risk be diversified away by investing in both Kezar Life and Surrozen 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 Surrozen 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 Surrozen, you can compare the effects of market volatilities on Kezar Life and Surrozen 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 Surrozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and Surrozen.

Diversification Opportunities for Kezar Life and Surrozen

-0.17

Correlation Coefficient

Kezar Life  Surrozen

Good diversification

The 3 months correlation between Kezar and Surrozen is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Surrozen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surrozen 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 Surrozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surrozen has no effect on the direction of Kezar Life i.e., Kezar Life and Surrozen go up and down completely randomly.

Pair Corralation between Kezar Life and Surrozen

Considering the 90-day investment horizon Kezar Life Sciences is expected to under-perform the Surrozen. But the stock apears to be less risky and, when comparing its historical volatility, Kezar Life Sciences is 2.71 times less risky than Surrozen. The stock trades about -0.15 of its potential returns per unit of risk. The Surrozen is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,220  in Surrozen on November 29, 2024 and sell it today you would lose (57.00) from holding Surrozen or give up 4.67% of portfolio value over 90 days.

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

Kezar Life Sciences  vs.  Surrozen

Kezar Life Sciences

Risk-Adjusted Performance

Very Weak

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

Surrozen

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Surrozen are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Surrozen may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Kezar Life and Surrozen

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

The idea behind Kezar Life Sciences and Surrozen 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.