Correlation Between X4 Pharmaceuticals and Entera Bio
Can any of the company-specific risk be diversified away by investing in both X4 Pharmaceuticals and Entera Bio 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 X4 Pharmaceuticals and Entera Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X4 Pharmaceuticals and Entera Bio, you can compare the effects of market volatilities on X4 Pharmaceuticals and Entera Bio 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 X4 Pharmaceuticals with a short position of Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of X4 Pharmaceuticals and Entera Bio.
Diversification Opportunities for X4 Pharmaceuticals and Entera Bio
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XFOR and Entera is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding X4 Pharmaceuticals and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio and X4 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 X4 Pharmaceuticals are associated (or correlated) with Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of X4 Pharmaceuticals i.e., X4 Pharmaceuticals and Entera Bio go up and down completely randomly.
Pair Corralation between X4 Pharmaceuticals and Entera Bio
Given the investment horizon of 90 days X4 Pharmaceuticals is expected to generate 2.27 times more return on investment than Entera Bio. However, X4 Pharmaceuticals is 2.27 times more volatile than Entera Bio. It trades about 0.25 of its potential returns per unit of risk. Entera Bio is currently generating about 0.22 per unit of risk. If you would invest 41.00 in X4 Pharmaceuticals on September 15, 2024 and sell it today you would earn a total of 26.00 from holding X4 Pharmaceuticals or generate 63.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X4 Pharmaceuticals vs. Entera Bio
Performance |
| Timeline |
| X4 Pharmaceuticals |
| Entera Bio |
X4 Pharmaceuticals and Entera Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X4 Pharmaceuticals and Entera Bio
The main advantage of trading using opposite X4 Pharmaceuticals and Entera Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X4 Pharmaceuticals position performs unexpectedly, Entera Bio 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 Entera Bio will offset losses from the drop in Entera Bio's long position.| X4 Pharmaceuticals vs. Terns Pharmaceuticals | X4 Pharmaceuticals vs. Day One Biopharmaceuticals | X4 Pharmaceuticals vs. PDS Biotechnology Corp | X4 Pharmaceuticals vs. Inozyme Pharma |
| Entera Bio vs. Puma Biotechnology | Entera Bio vs. Iovance Biotherapeutics | Entera Bio vs. Day One Biopharmaceuticals | Entera Bio vs. Inozyme Pharma |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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