Correlation Between Century Therapeutics and Exelixis
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics 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 Century Therapeutics and Exelixis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Exelixis, you can compare the effects of market volatilities on Century Therapeutics 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 Century Therapeutics with a short position of Exelixis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Exelixis.
Diversification Opportunities for Century Therapeutics and Exelixis
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and Exelixis is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Exelixis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelixis and Century 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 Century Therapeutics 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 Century Therapeutics i.e., Century Therapeutics and Exelixis go up and down completely randomly.
Pair Corralation between Century Therapeutics and Exelixis
Given the investment horizon of 90 days Century Therapeutics is expected to under-perform the Exelixis. In addition to that, Century Therapeutics is 2.78 times more volatile than Exelixis. It trades about -0.06 of its total potential returns per unit of risk. Exelixis is currently generating about 0.09 per unit of volatility. If you would invest 1,667 in Exelixis on August 27, 2024 and sell it today you would earn a total of 1,894 from holding Exelixis or generate 113.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Therapeutics vs. Exelixis
Performance |
| Timeline |
| Century Therapeutics |
| Exelixis |
Century Therapeutics and Exelixis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Exelixis
The main advantage of trading using opposite Century Therapeutics and Exelixis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics 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.| Century Therapeutics vs. Eliem Therapeutics | Century Therapeutics vs. HCW Biologics | Century Therapeutics vs. Scpharmaceuticals | Century Therapeutics vs. Milestone 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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