Correlation Between NewAmsterdam Pharma and XTL Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both NewAmsterdam Pharma 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 NewAmsterdam Pharma and XTL Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewAmsterdam Pharma and XTL Biopharmaceuticals Ltd, you can compare the effects of market volatilities on NewAmsterdam Pharma 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 NewAmsterdam Pharma with a short position of XTL Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewAmsterdam Pharma and XTL Biopharmaceutica.
Diversification Opportunities for NewAmsterdam Pharma and XTL Biopharmaceutica
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NewAmsterdam and XTL is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NewAmsterdam Pharma and XTL Biopharmaceuticals Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTL Biopharmaceuticals and NewAmsterdam Pharma 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 NewAmsterdam Pharma 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 NewAmsterdam Pharma i.e., NewAmsterdam Pharma and XTL Biopharmaceutica go up and down completely randomly.
Pair Corralation between NewAmsterdam Pharma and XTL Biopharmaceutica
Given the investment horizon of 90 days NewAmsterdam Pharma is expected to generate 1.67 times less return on investment than XTL Biopharmaceutica. But when comparing it to its historical volatility, NewAmsterdam Pharma is 1.83 times less risky than XTL Biopharmaceutica. It trades about 0.04 of its potential returns per unit of risk. XTL Biopharmaceuticals Ltd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 128.00 in XTL Biopharmaceuticals Ltd on November 28, 2024 and sell it today you would earn a total of 14.00 from holding XTL Biopharmaceuticals Ltd or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.1% |
| Values | Daily Returns |
NewAmsterdam Pharma vs. XTL Biopharmaceuticals Ltd
Performance |
| Timeline |
| NewAmsterdam Pharma |
| XTL Biopharmaceuticals |
NewAmsterdam Pharma and XTL Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewAmsterdam Pharma and XTL Biopharmaceutica
The main advantage of trading using opposite NewAmsterdam Pharma and XTL Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewAmsterdam Pharma 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.| NewAmsterdam Pharma vs. Monte Rosa Therapeutics | NewAmsterdam Pharma vs. Inventiva Sa | NewAmsterdam Pharma vs. Cullinan Oncology LLC | NewAmsterdam Pharma vs. Compass Therapeutics |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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