Correlation Between Senti Biosciences and Keros TherapeuticsInc

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

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

Diversification Opportunities for Senti Biosciences and Keros TherapeuticsInc

-0.02

Correlation Coefficient

Senti Biosciences  Keros TherapeuticsInc

Good diversification

The 1 month correlation between Senti and Keros is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Senti Biosciences and Keros TherapeuticsInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros TherapeuticsInc and Senti Biosciences 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 Senti Biosciences are associated (or correlated) with Keros TherapeuticsInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keros TherapeuticsInc has no effect on the direction of Senti Biosciences i.e., Senti Biosciences and Keros TherapeuticsInc go up and down completely randomly.

Pair Corralation between Senti Biosciences and Keros TherapeuticsInc

Given the investment horizon of 90 days Senti Biosciences is expected to generate 1.67 times more return on investment than Keros TherapeuticsInc. However, Senti Biosciences is 1.67 times more volatile than Keros TherapeuticsInc. It trades about 0.31 of its potential returns per unit of risk. Keros TherapeuticsInc is currently generating about -0.08 per unit of risk. If you would invest  28.00  in Senti Biosciences on February 21, 2024 and sell it today you would earn a total of  10.00  from holding Senti Biosciences or generate 35.71% return on investment over 90 days.

Time Period	1 Month [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Senti Biosciences  vs.  Keros TherapeuticsInc

Senti Biosciences

Risk-Adjusted Performance

24 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Senti Biosciences are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Senti Biosciences demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Keros TherapeuticsInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keros TherapeuticsInc 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 basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Senti Biosciences and Keros TherapeuticsInc

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

The idea behind Senti Biosciences and Keros TherapeuticsInc 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.