Correlation Between Cullinan Oncology and CytomX Therapeutics

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

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

Diversification Opportunities for Cullinan Oncology and CytomX Therapeutics

0.78

Correlation Coefficient

Cullinan Oncology  CytomX Therapeutics

Poor diversification

The 3 months correlation between Cullinan and CytomX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cullinan Oncology LLC and CytomX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CytomX Therapeutics and Cullinan Oncology 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 Cullinan Oncology LLC are associated (or correlated) with CytomX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CytomX Therapeutics has no effect on the direction of Cullinan Oncology i.e., Cullinan Oncology and CytomX Therapeutics go up and down completely randomly.

Pair Corralation between Cullinan Oncology and CytomX Therapeutics

Given the investment horizon of 90 days Cullinan Oncology LLC is expected to under-perform the CytomX Therapeutics. In addition to that, Cullinan Oncology is 1.06 times more volatile than CytomX Therapeutics. It trades about -0.13 of its total potential returns per unit of risk. CytomX Therapeutics is currently generating about -0.05 per unit of volatility. If you would invest  125.00  in CytomX Therapeutics on September 4, 2024 and sell it today you would lose (16.00) from holding CytomX Therapeutics or give up 12.8% of portfolio value over 90 days.

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

Cullinan Oncology LLC  vs.  CytomX Therapeutics

Cullinan Oncology LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cullinan Oncology LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CytomX Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CytomX Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Cullinan Oncology and CytomX Therapeutics

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

The idea behind Cullinan Oncology LLC and CytomX 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.