Correlation Between XTL Biopharmaceutica and Benitec Biopharma

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

By analyzing existing cross correlation between XTL Biopharmaceuticals Ltd and Benitec Biopharma Ltd, you can compare the effects of market volatilities on XTL Biopharmaceutica and Benitec Biopharma 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 XTL Biopharmaceutica with a short position of Benitec Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTL Biopharmaceutica and Benitec Biopharma.

Diversification Opportunities for XTL Biopharmaceutica and Benitec Biopharma

-0.58

Correlation Coefficient

XTL Biopharmaceutica  Benitec Biopharma

Excellent diversification

The 3 months correlation between XTL and Benitec is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding XTL Biopharmaceuticals Ltd and Benitec Biopharma Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benitec Biopharma and XTL Biopharmaceutica 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 XTL Biopharmaceuticals Ltd are associated (or correlated) with Benitec Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benitec Biopharma has no effect on the direction of XTL Biopharmaceutica i.e., XTL Biopharmaceutica and Benitec Biopharma go up and down completely randomly.

Pair Corralation between XTL Biopharmaceutica and Benitec Biopharma

Given the investment horizon of 90 days XTL Biopharmaceutica is expected to generate 1.08 times less return on investment than Benitec Biopharma. In addition to that, XTL Biopharmaceutica is 1.69 times more volatile than Benitec Biopharma Ltd. It trades about 0.06 of its total potential returns per unit of risk. Benitec Biopharma Ltd is currently generating about 0.11 per unit of volatility. If you would invest  340.00  in Benitec Biopharma Ltd on September 28, 2024 and sell it today you would earn a total of  860.00  from holding Benitec Biopharma Ltd or generate 252.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.25%
Values	Daily Returns

XTL Biopharmaceuticals Ltd  vs.  Benitec Biopharma Ltd

XTL Biopharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XTL Biopharmaceuticals Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, XTL Biopharmaceutica is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Benitec Biopharma

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Benitec Biopharma Ltd are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Benitec Biopharma exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XTL Biopharmaceutica and Benitec Biopharma

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

The idea behind XTL Biopharmaceuticals Ltd and Benitec Biopharma Ltd 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.