Correlation Between Enliven Therapeutics and XBiotech
Can any of the company-specific risk be diversified away by investing in both Enliven 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 Enliven Therapeutics and XBiotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enliven Therapeutics and XBiotech, you can compare the effects of market volatilities on Enliven 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 Enliven Therapeutics with a short position of XBiotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enliven Therapeutics and XBiotech.
Diversification Opportunities for Enliven Therapeutics and XBiotech
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enliven and XBiotech is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Enliven Therapeutics and XBiotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBiotech and Enliven 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 Enliven 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 Enliven Therapeutics i.e., Enliven Therapeutics and XBiotech go up and down completely randomly.
Pair Corralation between Enliven Therapeutics and XBiotech
Given the investment horizon of 90 days Enliven Therapeutics is expected to generate 1.53 times less return on investment than XBiotech. In addition to that, Enliven Therapeutics is 1.01 times more volatile than XBiotech. It trades about 0.04 of its total potential returns per unit of risk. XBiotech is currently generating about 0.06 per unit of volatility. If you would invest 318.00 in XBiotech on September 2, 2024 and sell it today you would earn a total of 443.00 from holding XBiotech or generate 139.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enliven Therapeutics vs. XBiotech
Performance |
| Timeline |
| Enliven Therapeutics |
| XBiotech |
Enliven Therapeutics and XBiotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enliven Therapeutics and XBiotech
The main advantage of trading using opposite Enliven Therapeutics and XBiotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enliven 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.| Enliven Therapeutics vs. Crinetics Pharmaceuticals | Enliven Therapeutics vs. Enanta Pharmaceuticals | Enliven Therapeutics vs. Amicus Therapeutics | Enliven Therapeutics vs. Connect Biopharma Holdings |
| XBiotech vs. Tff Pharmaceuticals | XBiotech vs. Eliem Therapeutics | XBiotech vs. Inhibrx | XBiotech vs. Enliven 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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