Correlation Between Savara and XOMA
Can any of the company-specific risk be diversified away by investing in both Savara 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 Savara and XOMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Savara Inc and XOMA Corporation, you can compare the effects of market volatilities on Savara 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 Savara with a short position of XOMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Savara and XOMA.
Diversification Opportunities for Savara and XOMA
Pay attention - limited upside
The 3 months correlation between Savara and XOMA is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Savara Inc and XOMA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA and Savara 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 Savara Inc 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 Savara i.e., Savara and XOMA go up and down completely randomly.
Pair Corralation between Savara and XOMA
Given the investment horizon of 90 days Savara Inc is expected to under-perform the XOMA. In addition to that, Savara is 16.08 times more volatile than XOMA Corporation. It trades about -0.18 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 2,532 in XOMA Corporation on November 29, 2024 and sell it today you would earn a total of 5.00 from holding XOMA Corporation or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Savara Inc vs. XOMA Corp.
Performance |
| Timeline |
| Savara Inc |
| XOMA |
Savara and XOMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Savara and XOMA
The main advantage of trading using opposite Savara and XOMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Savara 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.| Savara vs. Stoke Therapeutics | Savara vs. Edgewise Therapeutics | Savara vs. Crinetics Pharmaceuticals | Savara vs. Dyne 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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