Correlation Between Kezar Life and XTL Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Kezar Life and XTL Biopharmaceutica 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 Kezar Life and XTL Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kezar Life Sciences and XTL Biopharmaceuticals Ltd, you can compare the effects of market volatilities on Kezar Life and XTL Biopharmaceutica 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 Kezar Life with a short position of XTL Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and XTL Biopharmaceutica.
Diversification Opportunities for Kezar Life and XTL Biopharmaceutica
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kezar and XTL is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and XTL Biopharmaceuticals Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTL Biopharmaceuticals and Kezar Life 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 Kezar Life Sciences are associated (or correlated) with XTL Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTL Biopharmaceuticals has no effect on the direction of Kezar Life i.e., Kezar Life and XTL Biopharmaceutica go up and down completely randomly.
Pair Corralation between Kezar Life and XTL Biopharmaceutica
Considering the 90-day investment horizon Kezar Life Sciences is expected to under-perform the XTL Biopharmaceutica. But the stock apears to be less risky and, when comparing its historical volatility, Kezar Life Sciences is 3.25 times less risky than XTL Biopharmaceutica. The stock trades about -0.16 of its potential returns per unit of risk. The XTL Biopharmaceuticals Ltd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 178.00 in XTL Biopharmaceuticals Ltd on August 31, 2024 and sell it today you would earn a total of 10.00 from holding XTL Biopharmaceuticals Ltd or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kezar Life Sciences vs. XTL Biopharmaceuticals Ltd
Performance |
| Timeline |
| Kezar Life Sciences |
| XTL Biopharmaceuticals |
Kezar Life and XTL Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and XTL Biopharmaceutica
The main advantage of trading using opposite Kezar Life and XTL Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life position performs unexpectedly, XTL Biopharmaceutica 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 XTL Biopharmaceutica will offset losses from the drop in XTL Biopharmaceutica's long position.| Kezar Life vs. Cue Biopharma | Kezar Life vs. Eliem Therapeutics | Kezar Life vs. Inhibrx | Kezar Life vs. Molecular Partners AG |
| XTL Biopharmaceutica vs. Benitec Biopharma Ltd | XTL Biopharmaceutica vs. Xenetic Biosciences | XTL Biopharmaceutica vs. ProPhase Labs | XTL Biopharmaceutica vs. BOS Better Online |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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