Correlation Between Exelixis and Axsome Therapeutics
Can any of the company-specific risk be diversified away by investing in both Exelixis and Axsome Therapeutics 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 Exelixis and Axsome Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exelixis and Axsome Therapeutics, you can compare the effects of market volatilities on Exelixis and Axsome Therapeutics 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 Exelixis with a short position of Axsome Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exelixis and Axsome Therapeutics.
Diversification Opportunities for Exelixis and Axsome Therapeutics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Exelixis and Axsome is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Exelixis and Axsome Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axsome Therapeutics and Exelixis 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 Exelixis are associated (or correlated) with Axsome Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axsome Therapeutics has no effect on the direction of Exelixis i.e., Exelixis and Axsome Therapeutics go up and down completely randomly.
Pair Corralation between Exelixis and Axsome Therapeutics
Given the investment horizon of 90 days Exelixis is expected to generate 8.21 times less return on investment than Axsome Therapeutics. But when comparing it to its historical volatility, Exelixis is 1.62 times less risky than Axsome Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Axsome Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,369 in Axsome Therapeutics on January 16, 2025 and sell it today you would earn a total of 1,014 from holding Axsome Therapeutics or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exelixis vs. Axsome Therapeutics
Performance |
| Timeline |
| Exelixis |
| Axsome Therapeutics |
Exelixis and Axsome Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exelixis and Axsome Therapeutics
The main advantage of trading using opposite Exelixis and Axsome Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exelixis position performs unexpectedly, Axsome Therapeutics 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 Axsome Therapeutics will offset losses from the drop in Axsome Therapeutics' long position.| Exelixis vs. TG Therapeutics | Exelixis vs. Viking Therapeutics | Exelixis vs. Madrigal Pharmaceuticals | Exelixis vs. BioXcel Therapeutics |
| Axsome Therapeutics vs. Incyte | Axsome Therapeutics vs. Sarepta Therapeutics | Axsome Therapeutics vs. ACADIA Pharmaceuticals | Axsome Therapeutics vs. Viking 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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