Correlation Between XOMA Corp and Septerna, Common

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

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

Diversification Opportunities for XOMA Corp and Septerna, Common

-0.32

Correlation Coefficient

XOMA Corp  Septerna, Common

Very good diversification

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

Pair Corralation between XOMA Corp and Septerna, Common

Assuming the 90 days horizon XOMA Corp is expected to generate 24.59 times less return on investment than Septerna, Common. But when comparing it to its historical volatility, XOMA Corp is 7.39 times less risky than Septerna, Common. It trades about 0.05 of its potential returns per unit of risk. Septerna, Common Stock is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,800  in Septerna, Common Stock on September 24, 2024 and sell it today you would earn a total of  628.00  from holding Septerna, Common Stock or generate 34.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.63%
Values	Daily Returns

XOMA Corp  vs.  Septerna, Common Stock

XOMA Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XOMA Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, XOMA Corp is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Septerna, Common Stock

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Septerna, Common Stock are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Septerna, Common displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XOMA Corp and Septerna, Common

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

The idea behind XOMA Corp and Septerna, Common Stock 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.