Correlation Between Surrozen and CytomX Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Surrozen and CytomX Therapeutics 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 Surrozen and CytomX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surrozen and CytomX Therapeutics, you can compare the effects of market volatilities on Surrozen and CytomX Therapeutics 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 Surrozen with a short position of CytomX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surrozen and CytomX Therapeutics.

Diversification Opportunities for Surrozen and CytomX Therapeutics

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between Surrozen and CytomX is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Surrozen and CytomX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CytomX Therapeutics and Surrozen 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 Surrozen are associated (or correlated) with CytomX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CytomX Therapeutics has no effect on the direction of Surrozen i.e., Surrozen and CytomX Therapeutics go up and down completely randomly.

Pair Corralation between Surrozen and CytomX Therapeutics

Given the investment horizon of 90 days Surrozen is expected to generate 0.58 times more return on investment than CytomX Therapeutics. However, Surrozen is 1.71 times less risky than CytomX Therapeutics. It trades about 0.02 of its potential returns per unit of risk. CytomX Therapeutics is currently generating about 0.01 per unit of risk. If you would invest  1,710  in Surrozen on November 1, 2024 and sell it today you would lose (507.00) from holding Surrozen or give up 29.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Surrozen  vs.  CytomX Therapeutics

 Performance 
       Timeline  
Surrozen 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Surrozen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Surrozen is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.
CytomX Therapeutics 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days CytomX Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Surrozen and CytomX Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Surrozen and CytomX Therapeutics

The main advantage of trading using opposite Surrozen and CytomX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surrozen position performs unexpectedly, CytomX Therapeutics 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 CytomX Therapeutics will offset losses from the drop in CytomX Therapeutics' long position.
The idea behind Surrozen and CytomX Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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