Correlation Between Seres Therapeutics and Xeris Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Seres Therapeutics and Xeris Pharmaceuticals 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 Seres Therapeutics and Xeris Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seres Therapeutics and Xeris Pharmaceuticals, you can compare the effects of market volatilities on Seres Therapeutics and Xeris Pharmaceuticals 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 Seres Therapeutics with a short position of Xeris Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seres Therapeutics and Xeris Pharmaceuticals.
Diversification Opportunities for Seres Therapeutics and Xeris Pharmaceuticals
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seres and Xeris is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and Xeris Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xeris Pharmaceuticals and Seres 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 Seres Therapeutics are associated (or correlated) with Xeris Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xeris Pharmaceuticals has no effect on the direction of Seres Therapeutics i.e., Seres Therapeutics and Xeris Pharmaceuticals go up and down completely randomly.
Pair Corralation between Seres Therapeutics and Xeris Pharmaceuticals
Given the investment horizon of 90 days Seres Therapeutics is expected to generate 2.64 times more return on investment than Xeris Pharmaceuticals. However, Seres Therapeutics is 2.64 times more volatile than Xeris Pharmaceuticals. It trades about 0.13 of its potential returns per unit of risk. Xeris Pharmaceuticals is currently generating about 0.11 per unit of risk. If you would invest 77.00 in Seres Therapeutics on August 30, 2024 and sell it today you would earn a total of 15.00 from holding Seres Therapeutics or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seres Therapeutics vs. Xeris Pharmaceuticals
Performance |
| Timeline |
| Seres Therapeutics |
| Xeris Pharmaceuticals |
Seres Therapeutics and Xeris Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seres Therapeutics and Xeris Pharmaceuticals
The main advantage of trading using opposite Seres Therapeutics and Xeris Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seres Therapeutics position performs unexpectedly, Xeris Pharmaceuticals 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 Xeris Pharmaceuticals will offset losses from the drop in Xeris Pharmaceuticals' long position.| Seres Therapeutics vs. Syros Pharmaceuticals | Seres Therapeutics vs. Iovance Biotherapeutics | Seres Therapeutics vs. Veracyte | Seres Therapeutics vs. Fate Therapeutics |
| Xeris Pharmaceuticals vs. Protalix Biotherapeutics | Xeris Pharmaceuticals vs. Seres Therapeutics | Xeris Pharmaceuticals vs. Cidara Therapeutics | Xeris Pharmaceuticals vs. Immunitybio |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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