Correlation Between Bioatla and Keros Therapeutics

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

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

Diversification Opportunities for Bioatla and Keros Therapeutics

0.52

Correlation Coefficient

Bioatla  Keros Therapeutics

Very weak diversification

The 3 months correlation between Bioatla and Keros is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bioatla and Keros Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros Therapeutics and Bioatla 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 Bioatla are associated (or correlated) with Keros Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keros Therapeutics has no effect on the direction of Bioatla i.e., Bioatla and Keros Therapeutics go up and down completely randomly.

Pair Corralation between Bioatla and Keros Therapeutics

Given the investment horizon of 90 days Bioatla is expected to generate 0.48 times more return on investment than Keros Therapeutics. However, Bioatla is 2.1 times less risky than Keros Therapeutics. It trades about -0.14 of its potential returns per unit of risk. Keros Therapeutics is currently generating about -0.12 per unit of risk. If you would invest  195.00  in Bioatla on September 19, 2024 and sell it today you would lose (64.00) from holding Bioatla or give up 32.82% of portfolio value over 90 days.

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

Bioatla  vs.  Keros Therapeutics

Bioatla

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bioatla has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Keros Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bioatla and Keros Therapeutics

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

The idea behind Bioatla and Keros Therapeutics 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 CEOs Directory module to screen CEOs from public companies around the world.