Correlation Between CytomX Therapeutics and Virax Biolabs
Can any of the company-specific risk be diversified away by investing in both CytomX Therapeutics and Virax Biolabs 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 CytomX Therapeutics and Virax Biolabs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CytomX Therapeutics and Virax Biolabs Group, you can compare the effects of market volatilities on CytomX Therapeutics and Virax Biolabs 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 CytomX Therapeutics with a short position of Virax Biolabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of CytomX Therapeutics and Virax Biolabs.
Diversification Opportunities for CytomX Therapeutics and Virax Biolabs
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CytomX and Virax is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CytomX Therapeutics and Virax Biolabs Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virax Biolabs Group and CytomX 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 CytomX Therapeutics are associated (or correlated) with Virax Biolabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virax Biolabs Group has no effect on the direction of CytomX Therapeutics i.e., CytomX Therapeutics and Virax Biolabs go up and down completely randomly.
Pair Corralation between CytomX Therapeutics and Virax Biolabs
Given the investment horizon of 90 days CytomX Therapeutics is expected to generate 1.26 times less return on investment than Virax Biolabs. But when comparing it to its historical volatility, CytomX Therapeutics is 1.0 times less risky than Virax Biolabs. It trades about 0.02 of its potential returns per unit of risk. Virax Biolabs Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 410.00 in Virax Biolabs Group on August 31, 2024 and sell it today you would lose (213.00) from holding Virax Biolabs Group or give up 51.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CytomX Therapeutics vs. Virax Biolabs Group
Performance |
| Timeline |
| CytomX Therapeutics |
| Virax Biolabs Group |
CytomX Therapeutics and Virax Biolabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CytomX Therapeutics and Virax Biolabs
The main advantage of trading using opposite CytomX Therapeutics and Virax Biolabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CytomX Therapeutics position performs unexpectedly, Virax Biolabs 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 Virax Biolabs will offset losses from the drop in Virax Biolabs' long position.| CytomX Therapeutics vs. Spero Therapeutics | CytomX Therapeutics vs. Instil Bio | CytomX Therapeutics vs. NextCure | CytomX Therapeutics vs. Assembly Biosciences |
| Virax Biolabs vs. Revelation Biosciences | Virax Biolabs vs. Kiora Pharmaceuticals | Virax Biolabs vs. Quoin Pharmaceuticals Ltd | Virax Biolabs vs. Neurobo Pharmaceuticals |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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