Correlation Between Cyclacel Pharmaceuticals and XOMA
Can any of the company-specific risk be diversified away by investing in both Cyclacel Pharmaceuticals and XOMA 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 Cyclacel Pharmaceuticals and XOMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyclacel Pharmaceuticals and XOMA Corporation, you can compare the effects of market volatilities on Cyclacel Pharmaceuticals and XOMA 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 Cyclacel Pharmaceuticals with a short position of XOMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyclacel Pharmaceuticals and XOMA.
Diversification Opportunities for Cyclacel Pharmaceuticals and XOMA
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cyclacel and XOMA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cyclacel Pharmaceuticals and XOMA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA and Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals are associated (or correlated) with XOMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XOMA has no effect on the direction of Cyclacel Pharmaceuticals i.e., Cyclacel Pharmaceuticals and XOMA go up and down completely randomly.
Pair Corralation between Cyclacel Pharmaceuticals and XOMA
Assuming the 90 days horizon Cyclacel Pharmaceuticals is expected to under-perform the XOMA. In addition to that, Cyclacel Pharmaceuticals is 10.86 times more volatile than XOMA Corporation. It trades about -0.05 of its total potential returns per unit of risk. XOMA Corporation is currently generating about 0.06 per unit of volatility. If you would invest 2,492 in XOMA Corporation on August 28, 2024 and sell it today you would earn a total of 35.00 from holding XOMA Corporation or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cyclacel Pharmaceuticals vs. XOMA Corp.
Performance |
| Timeline |
| Cyclacel Pharmaceuticals |
| XOMA |
Cyclacel Pharmaceuticals and XOMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cyclacel Pharmaceuticals and XOMA
The main advantage of trading using opposite Cyclacel Pharmaceuticals and XOMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyclacel Pharmaceuticals position performs unexpectedly, XOMA 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 XOMA will offset losses from the drop in XOMA's long position.| Cyclacel Pharmaceuticals vs. Absci Corp | Cyclacel Pharmaceuticals vs. Larimar Therapeutics | Cyclacel Pharmaceuticals vs. InMed Pharmaceuticals | Cyclacel Pharmaceuticals vs. Kronos Bio |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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