Correlation Between C4 Therapeutics and XBiotech
Can any of the company-specific risk be diversified away by investing in both C4 Therapeutics and XBiotech 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 C4 Therapeutics and XBiotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C4 Therapeutics and XBiotech, you can compare the effects of market volatilities on C4 Therapeutics and XBiotech 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 C4 Therapeutics with a short position of XBiotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of C4 Therapeutics and XBiotech.
Diversification Opportunities for C4 Therapeutics and XBiotech
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CCCC and XBiotech is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding C4 Therapeutics and XBiotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBiotech and C4 Therapeutics 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 C4 Therapeutics are associated (or correlated) with XBiotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBiotech has no effect on the direction of C4 Therapeutics i.e., C4 Therapeutics and XBiotech go up and down completely randomly.
Pair Corralation between C4 Therapeutics and XBiotech
Given the investment horizon of 90 days C4 Therapeutics is expected to under-perform the XBiotech. In addition to that, C4 Therapeutics is 1.63 times more volatile than XBiotech. It trades about -0.23 of its total potential returns per unit of risk. XBiotech is currently generating about -0.12 per unit of volatility. If you would invest 730.00 in XBiotech on September 12, 2024 and sell it today you would lose (67.00) from holding XBiotech or give up 9.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
C4 Therapeutics vs. XBiotech
Performance |
| Timeline |
| C4 Therapeutics |
| XBiotech |
C4 Therapeutics and XBiotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C4 Therapeutics and XBiotech
The main advantage of trading using opposite C4 Therapeutics and XBiotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C4 Therapeutics position performs unexpectedly, XBiotech 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 XBiotech will offset losses from the drop in XBiotech's long position.| C4 Therapeutics vs. Shattuck Labs | C4 Therapeutics vs. Eliem Therapeutics | C4 Therapeutics vs. Prelude Therapeutics | C4 Therapeutics vs. Monte Rosa Therapeutics |
| XBiotech vs. Equillium | XBiotech vs. DiaMedica Therapeutics | XBiotech vs. Valneva SE ADR | XBiotech vs. Vivani Medical |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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