Correlation Between Adverum Biotechnologies and CytomX Therapeutics
Can any of the company-specific risk be diversified away by investing in both Adverum Biotechnologies 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 Adverum Biotechnologies and CytomX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adverum Biotechnologies and CytomX Therapeutics, you can compare the effects of market volatilities on Adverum Biotechnologies 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 Adverum Biotechnologies with a short position of CytomX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adverum Biotechnologies and CytomX Therapeutics.
Diversification Opportunities for Adverum Biotechnologies and CytomX Therapeutics
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Adverum and CytomX is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Adverum Biotechnologies and CytomX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CytomX Therapeutics and Adverum Biotechnologies 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 Adverum Biotechnologies 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 Adverum Biotechnologies i.e., Adverum Biotechnologies and CytomX Therapeutics go up and down completely randomly.
Pair Corralation between Adverum Biotechnologies and CytomX Therapeutics
Given the investment horizon of 90 days Adverum Biotechnologies is expected to generate 0.93 times more return on investment than CytomX Therapeutics. However, Adverum Biotechnologies is 1.08 times less risky than CytomX Therapeutics. It trades about -0.04 of its potential returns per unit of risk. CytomX Therapeutics is currently generating about -0.04 per unit of risk. If you would invest 692.00 in Adverum Biotechnologies on August 28, 2024 and sell it today you would lose (77.00) from holding Adverum Biotechnologies or give up 11.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adverum Biotechnologies vs. CytomX Therapeutics
Performance |
| Timeline |
| Adverum Biotechnologies |
| CytomX Therapeutics |
Adverum Biotechnologies and CytomX Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adverum Biotechnologies and CytomX Therapeutics
The main advantage of trading using opposite Adverum Biotechnologies and CytomX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adverum Biotechnologies 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.| Adverum Biotechnologies vs. Uniqure NV | Adverum Biotechnologies vs. Rocket Pharmaceuticals | Adverum Biotechnologies vs. Rhythm Pharmaceuticals | Adverum Biotechnologies vs. Solid Biosciences LLC |
| CytomX Therapeutics vs. Eliem Therapeutics | CytomX Therapeutics vs. Scpharmaceuticals | CytomX Therapeutics vs. Milestone Pharmaceuticals | CytomX Therapeutics vs. Seres Therapeutics |
Check out your portfolio center.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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