Correlation Between Molecular Templates and Xencor
Can any of the company-specific risk be diversified away by investing in both Molecular Templates and Xencor 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 Molecular Templates and Xencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molecular Templates and Xencor Inc, you can compare the effects of market volatilities on Molecular Templates and Xencor 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 Molecular Templates with a short position of Xencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molecular Templates and Xencor.
Diversification Opportunities for Molecular Templates and Xencor
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Molecular and Xencor is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Templates and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc and Molecular Templates 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 Molecular Templates are associated (or correlated) with Xencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xencor Inc has no effect on the direction of Molecular Templates i.e., Molecular Templates and Xencor go up and down completely randomly.
Pair Corralation between Molecular Templates and Xencor
Given the investment horizon of 90 days Molecular Templates is expected to under-perform the Xencor. In addition to that, Molecular Templates is 12.01 times more volatile than Xencor Inc. It trades about -0.06 of its total potential returns per unit of risk. Xencor Inc is currently generating about 0.44 per unit of volatility. If you would invest 2,116 in Xencor Inc on August 25, 2024 and sell it today you would earn a total of 385.00 from holding Xencor Inc or generate 18.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molecular Templates vs. Xencor Inc
Performance |
| Timeline |
| Molecular Templates |
| Xencor Inc |
Molecular Templates and Xencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molecular Templates and Xencor
The main advantage of trading using opposite Molecular Templates and Xencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molecular Templates position performs unexpectedly, Xencor 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 Xencor will offset losses from the drop in Xencor's long position.| Molecular Templates vs. Century Therapeutics | Molecular Templates vs. Kezar Life Sciences | Molecular Templates vs. Mineralys Therapeutics, Common | Molecular Templates vs. Nkarta Inc |
| Xencor vs. Edgewise Therapeutics | Xencor vs. Keros Therapeutics | Xencor vs. Monte Rosa Therapeutics | Xencor vs. Mineralys Therapeutics, Common |
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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