Correlation Between Nurix Therapeutics and Kronos Bio

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

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

Diversification Opportunities for Nurix Therapeutics and Kronos Bio

-0.03

Correlation Coefficient

Nurix Therapeutics  Kronos Bio

Good diversification

The 3 months correlation between Nurix and Kronos is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nurix Therapeutics and Kronos Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Bio and Nurix 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 Nurix Therapeutics are associated (or correlated) with Kronos Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Bio has no effect on the direction of Nurix Therapeutics i.e., Nurix Therapeutics and Kronos Bio go up and down completely randomly.

Pair Corralation between Nurix Therapeutics and Kronos Bio

Given the investment horizon of 90 days Nurix Therapeutics is expected to under-perform the Kronos Bio. In addition to that, Nurix Therapeutics is 1.87 times more volatile than Kronos Bio. It trades about -0.34 of its total potential returns per unit of risk. Kronos Bio is currently generating about -0.07 per unit of volatility. If you would invest  98.00  in Kronos Bio on December 5, 2024 and sell it today you would lose (3.58) from holding Kronos Bio or give up 3.65% of portfolio value over 90 days.

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

Nurix Therapeutics  vs.  Kronos Bio

Nurix Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nurix 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 forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kronos Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kronos Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Kronos Bio is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nurix Therapeutics and Kronos Bio

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

The idea behind Nurix Therapeutics and Kronos Bio 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.