Correlation Between Biomotion Sciences and XOMA
Can any of the company-specific risk be diversified away by investing in both Biomotion Sciences 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 Biomotion Sciences and XOMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomotion Sciences Warrant and XOMA Corporation, you can compare the effects of market volatilities on Biomotion Sciences 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 Biomotion Sciences with a short position of XOMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomotion Sciences and XOMA.
Diversification Opportunities for Biomotion Sciences and XOMA
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biomotion and XOMA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Biomotion Sciences Warrant and XOMA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA and Biomotion 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 Biomotion Sciences Warrant 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 Biomotion Sciences i.e., Biomotion Sciences and XOMA go up and down completely randomly.
Pair Corralation between Biomotion Sciences and XOMA
Assuming the 90 days horizon Biomotion Sciences Warrant is expected to generate 46.98 times more return on investment than XOMA. However, Biomotion Sciences is 46.98 times more volatile than XOMA Corporation. It trades about 0.08 of its potential returns per unit of risk. XOMA Corporation is currently generating about 0.06 per unit of risk. If you would invest 4.00 in Biomotion Sciences Warrant on August 28, 2024 and sell it today you would lose (2.31) from holding Biomotion Sciences Warrant or give up 57.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.12% |
| Values | Daily Returns |
Biomotion Sciences Warrant vs. XOMA Corp.
Performance |
| Timeline |
| Biomotion Sciences |
| XOMA |
Biomotion Sciences and XOMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomotion Sciences and XOMA
The main advantage of trading using opposite Biomotion Sciences and XOMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomotion Sciences 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.| Biomotion Sciences vs. Vivani Medical | Biomotion Sciences vs. Verve Therapeutics | Biomotion Sciences vs. Bright Minds Biosciences | Biomotion Sciences vs. Alpha Tau Medical |
| XOMA vs. Harrow Health 8625 | XOMA vs. SiriusPoint | XOMA vs. New York Mortgage | XOMA vs. Sachem Capital Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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