Correlation Between Ignyte Acquisition and XOMA
Can any of the company-specific risk be diversified away by investing in both Ignyte Acquisition 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 Ignyte Acquisition and XOMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ignyte Acquisition Corp and XOMA Corporation, you can compare the effects of market volatilities on Ignyte Acquisition 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 Ignyte Acquisition with a short position of XOMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ignyte Acquisition and XOMA.
Diversification Opportunities for Ignyte Acquisition and XOMA
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ignyte and XOMA is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ignyte Acquisition Corp and XOMA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA and Ignyte Acquisition 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 Ignyte Acquisition Corp 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 Ignyte Acquisition i.e., Ignyte Acquisition and XOMA go up and down completely randomly.
Pair Corralation between Ignyte Acquisition and XOMA
Given the investment horizon of 90 days Ignyte Acquisition Corp is expected to under-perform the XOMA. In addition to that, Ignyte Acquisition is 9.33 times more volatile than XOMA Corporation. It trades about -0.34 of its total potential returns per unit of risk. XOMA Corporation is currently generating about 0.06 per unit of volatility. If you would invest 2,001 in XOMA Corporation on August 28, 2024 and sell it today you would earn a total of 526.00 from holding XOMA Corporation or generate 26.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.89% |
| Values | Daily Returns |
Ignyte Acquisition Corp vs. XOMA Corp.
Performance |
| Timeline |
| Ignyte Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| XOMA |
Ignyte Acquisition and XOMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ignyte Acquisition and XOMA
The main advantage of trading using opposite Ignyte Acquisition and XOMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ignyte Acquisition 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.| Ignyte Acquisition vs. Akeso, Inc | Ignyte Acquisition vs. Innovation1 Biotech | Ignyte Acquisition vs. Ascletis Pharma | Ignyte Acquisition vs. Avax Techs |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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