Correlation Between Entera Bio and X4 Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Entera Bio and X4 Pharmaceuticals 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 Entera Bio and X4 Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entera Bio and X4 Pharmaceuticals, you can compare the effects of market volatilities on Entera Bio and X4 Pharmaceuticals 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 Entera Bio with a short position of X4 Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entera Bio and X4 Pharmaceuticals.
Diversification Opportunities for Entera Bio and X4 Pharmaceuticals
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Entera and XFOR is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Entera Bio and X4 Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X4 Pharmaceuticals and Entera Bio 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 Entera Bio are associated (or correlated) with X4 Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X4 Pharmaceuticals has no effect on the direction of Entera Bio i.e., Entera Bio and X4 Pharmaceuticals go up and down completely randomly.
Pair Corralation between Entera Bio and X4 Pharmaceuticals
Given the investment horizon of 90 days Entera Bio is expected to generate 2.63 times less return on investment than X4 Pharmaceuticals. But when comparing it to its historical volatility, Entera Bio is 2.27 times less risky than X4 Pharmaceuticals. It trades about 0.22 of its potential returns per unit of risk. X4 Pharmaceuticals is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 41.00 in X4 Pharmaceuticals on September 15, 2024 and sell it today you would earn a total of 26.00 from holding X4 Pharmaceuticals or generate 63.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entera Bio vs. X4 Pharmaceuticals
Performance |
| Timeline |
| Entera Bio |
| X4 Pharmaceuticals |
Entera Bio and X4 Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entera Bio and X4 Pharmaceuticals
The main advantage of trading using opposite Entera Bio and X4 Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entera Bio position performs unexpectedly, X4 Pharmaceuticals 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 X4 Pharmaceuticals will offset losses from the drop in X4 Pharmaceuticals' long position.| Entera Bio vs. Puma Biotechnology | Entera Bio vs. Iovance Biotherapeutics | Entera Bio vs. Day One Biopharmaceuticals | Entera Bio vs. Inozyme Pharma |
| X4 Pharmaceuticals vs. Terns Pharmaceuticals | X4 Pharmaceuticals vs. Day One Biopharmaceuticals | X4 Pharmaceuticals vs. PDS Biotechnology Corp | X4 Pharmaceuticals vs. Inozyme Pharma |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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