Correlation Between Akeso, and Krystal Biotech

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

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

Diversification Opportunities for Akeso, and Krystal Biotech

-0.2

Correlation Coefficient

Akeso,  Krystal Biotech

Good diversification

The 3 months correlation between Akeso, and Krystal is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Akeso, Inc and Krystal Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krystal Biotech and Akeso, 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 Akeso, Inc are associated (or correlated) with Krystal Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krystal Biotech has no effect on the direction of Akeso, i.e., Akeso, and Krystal Biotech go up and down completely randomly.

Pair Corralation between Akeso, and Krystal Biotech

Assuming the 90 days horizon Akeso, Inc is expected to generate 2.96 times more return on investment than Krystal Biotech. However, Akeso, is 2.96 times more volatile than Krystal Biotech. It trades about 0.15 of its potential returns per unit of risk. Krystal Biotech is currently generating about 0.05 per unit of risk. If you would invest  568.00  in Akeso, Inc on September 3, 2024 and sell it today you would earn a total of  392.00  from holding Akeso, Inc or generate 69.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Akeso, Inc  vs.  Krystal Biotech

Akeso, Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Akeso, Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Akeso, reported solid returns over the last few months and may actually be approaching a breakup point.

Krystal Biotech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Krystal Biotech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Krystal Biotech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Akeso, and Krystal Biotech

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

The idea behind Akeso, Inc and Krystal Biotech 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.