Correlation Between Cassava Sciences and Exelixis
Can any of the company-specific risk be diversified away by investing in both Cassava Sciences and Exelixis 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 Cassava Sciences and Exelixis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cassava Sciences and Exelixis, you can compare the effects of market volatilities on Cassava Sciences and Exelixis 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 Cassava Sciences with a short position of Exelixis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cassava Sciences and Exelixis.
Diversification Opportunities for Cassava Sciences and Exelixis
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cassava and Exelixis is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cassava Sciences and Exelixis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelixis and Cassava Sciences 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 Cassava Sciences are associated (or correlated) with Exelixis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelixis has no effect on the direction of Cassava Sciences i.e., Cassava Sciences and Exelixis go up and down completely randomly.
Pair Corralation between Cassava Sciences and Exelixis
Given the investment horizon of 90 days Cassava Sciences is expected to under-perform the Exelixis. But the stock apears to be less risky and, when comparing its historical volatility, Cassava Sciences is 1.21 times less risky than Exelixis. The stock trades about -0.35 of its potential returns per unit of risk. The Exelixis is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,450 in Exelixis on November 9, 2024 and sell it today you would lose (83.00) from holding Exelixis or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cassava Sciences vs. Exelixis
Performance |
| Timeline |
| Cassava Sciences |
| Exelixis |
Cassava Sciences and Exelixis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cassava Sciences and Exelixis
The main advantage of trading using opposite Cassava Sciences and Exelixis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cassava Sciences position performs unexpectedly, Exelixis 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 Exelixis will offset losses from the drop in Exelixis' long position.| Cassava Sciences vs. Annovis Bio | Cassava Sciences vs. Axsome Therapeutics | Cassava Sciences vs. Reviva Pharmaceuticals Holdings | Cassava Sciences vs. Seres Therapeutics |
| Exelixis vs. TG Therapeutics | Exelixis vs. Viking Therapeutics | Exelixis vs. Madrigal Pharmaceuticals | Exelixis vs. BioXcel 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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