Correlation Between Lixte Biotechnology and XOMA
Can any of the company-specific risk be diversified away by investing in both Lixte Biotechnology and XOMA 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 Lixte Biotechnology and XOMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lixte Biotechnology Holdings and XOMA Corporation, you can compare the effects of market volatilities on Lixte Biotechnology and XOMA 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 Lixte Biotechnology with a short position of XOMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixte Biotechnology and XOMA.
Diversification Opportunities for Lixte Biotechnology and XOMA
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lixte and XOMA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and XOMA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA and Lixte Biotechnology 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 Lixte Biotechnology Holdings are associated (or correlated) with XOMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XOMA has no effect on the direction of Lixte Biotechnology i.e., Lixte Biotechnology and XOMA go up and down completely randomly.
Pair Corralation between Lixte Biotechnology and XOMA
Given the investment horizon of 90 days Lixte Biotechnology Holdings is expected to generate 10.58 times more return on investment than XOMA. However, Lixte Biotechnology is 10.58 times more volatile than XOMA Corporation. It trades about 0.16 of its potential returns per unit of risk. XOMA Corporation is currently generating about 0.13 per unit of risk. If you would invest 222.00 in Lixte Biotechnology Holdings on November 3, 2024 and sell it today you would earn a total of 26.00 from holding Lixte Biotechnology Holdings or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lixte Biotechnology Holdings vs. XOMA Corp.
Performance |
| Timeline |
| Lixte Biotechnology |
| XOMA |
Lixte Biotechnology and XOMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lixte Biotechnology and XOMA
The main advantage of trading using opposite Lixte Biotechnology and XOMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixte Biotechnology position performs unexpectedly, XOMA 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 XOMA will offset losses from the drop in XOMA's long position.| Lixte Biotechnology vs. Allarity Therapeutics | Lixte Biotechnology vs. Virax Biolabs Group | Lixte Biotechnology vs. Quoin Pharmaceuticals Ltd | Lixte Biotechnology vs. Indaptus 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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