Correlation Between Sio Gene and CytomX Therapeutics

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

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

Diversification Opportunities for Sio Gene and CytomX Therapeutics

0.75

Correlation Coefficient

Sio Gene  CytomX Therapeutics

Poor diversification

The 3 months correlation between Sio and CytomX is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sio Gene Therapies and CytomX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CytomX Therapeutics and Sio Gene 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 Sio Gene Therapies 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 Sio Gene i.e., Sio Gene and CytomX Therapeutics go up and down completely randomly.

Pair Corralation between Sio Gene and CytomX Therapeutics

If you would invest  40.00  in Sio Gene Therapies on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Sio Gene Therapies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Sio Gene Therapies  vs.  CytomX Therapeutics

Sio Gene Therapies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sio Gene Therapies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sio Gene is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 fairly strong primary indicators, CytomX Therapeutics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sio Gene and CytomX Therapeutics

The main advantage of trading using opposite Sio Gene and CytomX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sio Gene 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 Sio Gene Therapies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.