Correlation Between Opus Genetics, and XOMA

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

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

Diversification Opportunities for Opus Genetics, and XOMA

-0.32

Correlation Coefficient

Opus Genetics,  XOMA

Very good diversification

The 3 months correlation between Opus and XOMA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Opus Genetics, and XOMA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA and Opus Genetics, 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 Opus Genetics, are associated (or correlated) with XOMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XOMA has no effect on the direction of Opus Genetics, i.e., Opus Genetics, and XOMA go up and down completely randomly.

Pair Corralation between Opus Genetics, and XOMA

Considering the 90-day investment horizon Opus Genetics, is expected to under-perform the XOMA. In addition to that, Opus Genetics, is 5.34 times more volatile than XOMA Corporation. It trades about -0.06 of its total potential returns per unit of risk. XOMA Corporation is currently generating about 0.09 per unit of volatility. If you would invest  2,066  in XOMA Corporation on September 17, 2024 and sell it today you would earn a total of  484.00  from holding XOMA Corporation or generate 23.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.66%
Values	Daily Returns

Opus Genetics,  vs.  XOMA Corp.

Opus Genetics,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Opus Genetics, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

XOMA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in XOMA Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, XOMA is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Opus Genetics, and XOMA

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

The idea behind Opus Genetics, and XOMA Corporation 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.