Correlation Between Xeris Pharmaceuticals and Capricor Therapeutics
Can any of the company-specific risk be diversified away by investing in both Xeris Pharmaceuticals and Capricor 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 Xeris Pharmaceuticals and Capricor Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xeris Pharmaceuticals and Capricor Therapeutics, you can compare the effects of market volatilities on Xeris Pharmaceuticals and Capricor 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 Xeris Pharmaceuticals with a short position of Capricor Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xeris Pharmaceuticals and Capricor Therapeutics.
Diversification Opportunities for Xeris Pharmaceuticals and Capricor Therapeutics
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xeris and Capricor is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xeris Pharmaceuticals and Capricor Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricor Therapeutics and Xeris 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 Xeris Pharmaceuticals are associated (or correlated) with Capricor Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricor Therapeutics has no effect on the direction of Xeris Pharmaceuticals i.e., Xeris Pharmaceuticals and Capricor Therapeutics go up and down completely randomly.
Pair Corralation between Xeris Pharmaceuticals and Capricor Therapeutics
Given the investment horizon of 90 days Xeris Pharmaceuticals is expected to generate 0.74 times more return on investment than Capricor Therapeutics. However, Xeris Pharmaceuticals is 1.35 times less risky than Capricor Therapeutics. It trades about 0.11 of its potential returns per unit of risk. Capricor Therapeutics is currently generating about -0.14 per unit of risk. If you would invest 323.00 in Xeris Pharmaceuticals on August 30, 2024 and sell it today you would earn a total of 22.00 from holding Xeris Pharmaceuticals or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xeris Pharmaceuticals vs. Capricor Therapeutics
Performance |
| Timeline |
| Xeris Pharmaceuticals |
| Capricor Therapeutics |
Xeris Pharmaceuticals and Capricor Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xeris Pharmaceuticals and Capricor Therapeutics
The main advantage of trading using opposite Xeris Pharmaceuticals and Capricor Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xeris Pharmaceuticals position performs unexpectedly, Capricor 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 Capricor Therapeutics will offset losses from the drop in Capricor Therapeutics' long position.| Xeris Pharmaceuticals vs. Protalix Biotherapeutics | Xeris Pharmaceuticals vs. Seres Therapeutics | Xeris Pharmaceuticals vs. Cidara Therapeutics | Xeris Pharmaceuticals vs. Immunitybio |
| Capricor Therapeutics vs. Ikena Oncology | Capricor Therapeutics vs. Eliem Therapeutics | Capricor Therapeutics vs. HCW Biologics | Capricor Therapeutics vs. RenovoRx |
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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