Correlation Between Incyte and Exelixis
Can any of the company-specific risk be diversified away by investing in both Incyte and Exelixis 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 Incyte and Exelixis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incyte and Exelixis, you can compare the effects of market volatilities on Incyte and Exelixis 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 Incyte with a short position of Exelixis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incyte and Exelixis.
Diversification Opportunities for Incyte and Exelixis
Almost no diversification
The 3 months correlation between Incyte and Exelixis is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Incyte and Exelixis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelixis and Incyte 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 Incyte are associated (or correlated) with Exelixis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelixis has no effect on the direction of Incyte i.e., Incyte and Exelixis go up and down completely randomly.
Pair Corralation between Incyte and Exelixis
Given the investment horizon of 90 days Incyte is expected to generate 2.0 times less return on investment than Exelixis. In addition to that, Incyte is 1.26 times more volatile than Exelixis. It trades about 0.16 of its total potential returns per unit of risk. Exelixis is currently generating about 0.41 per unit of volatility. If you would invest 2,850 in Exelixis on August 28, 2024 and sell it today you would earn a total of 788.00 from holding Exelixis or generate 27.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incyte vs. Exelixis
Performance |
| Timeline |
| Incyte |
| Exelixis |
Incyte and Exelixis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incyte and Exelixis
The main advantage of trading using opposite Incyte and Exelixis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incyte position performs unexpectedly, Exelixis 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 Exelixis will offset losses from the drop in Exelixis' long position.| Incyte vs. Alnylam Pharmaceuticals | Incyte vs. United Therapeutics | Incyte vs. Ultragenyx | Incyte vs. Apellis Pharmaceuticals |
| Exelixis vs. TG Therapeutics | Exelixis vs. Viking Therapeutics | Exelixis vs. Madrigal Pharmaceuticals | Exelixis vs. BioXcel 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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