Correlation Between Xenon Pharmaceuticals and BioCardia
Can any of the company-specific risk be diversified away by investing in both Xenon Pharmaceuticals and BioCardia 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 Xenon Pharmaceuticals and BioCardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xenon Pharmaceuticals and BioCardia, you can compare the effects of market volatilities on Xenon Pharmaceuticals and BioCardia 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 Xenon Pharmaceuticals with a short position of BioCardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenon Pharmaceuticals and BioCardia.
Diversification Opportunities for Xenon Pharmaceuticals and BioCardia
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xenon and BioCardia is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Xenon Pharmaceuticals and BioCardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCardia and Xenon Pharmaceuticals 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 Xenon Pharmaceuticals are associated (or correlated) with BioCardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioCardia has no effect on the direction of Xenon Pharmaceuticals i.e., Xenon Pharmaceuticals and BioCardia go up and down completely randomly.
Pair Corralation between Xenon Pharmaceuticals and BioCardia
Given the investment horizon of 90 days Xenon Pharmaceuticals is expected to generate 0.07 times more return on investment than BioCardia. However, Xenon Pharmaceuticals is 13.49 times less risky than BioCardia. It trades about 0.05 of its potential returns per unit of risk. BioCardia is currently generating about -0.16 per unit of risk. If you would invest 3,844 in Xenon Pharmaceuticals on August 30, 2024 and sell it today you would earn a total of 471.00 from holding Xenon Pharmaceuticals or generate 12.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 26.19% |
| Values | Daily Returns |
Xenon Pharmaceuticals vs. BioCardia
Performance |
| Timeline |
| Xenon Pharmaceuticals |
| BioCardia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xenon Pharmaceuticals and BioCardia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenon Pharmaceuticals and BioCardia
The main advantage of trading using opposite Xenon Pharmaceuticals and BioCardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenon Pharmaceuticals position performs unexpectedly, BioCardia 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 BioCardia will offset losses from the drop in BioCardia's long position.| Xenon Pharmaceuticals vs. Nuvalent | Xenon Pharmaceuticals vs. Arcellx | Xenon Pharmaceuticals vs. Vaxcyte | Xenon Pharmaceuticals vs. Viridian 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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