Correlation Between XOMA Corp and Third Harmonic
Can any of the company-specific risk be diversified away by investing in both XOMA Corp and Third Harmonic 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 XOMA Corp and Third Harmonic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XOMA Corp and Third Harmonic Bio, you can compare the effects of market volatilities on XOMA Corp and Third Harmonic 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 XOMA Corp with a short position of Third Harmonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of XOMA Corp and Third Harmonic.
Diversification Opportunities for XOMA Corp and Third Harmonic
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between XOMA and Third is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding XOMA Corp and Third Harmonic Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Harmonic Bio and XOMA Corp 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 XOMA Corp are associated (or correlated) with Third Harmonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Harmonic Bio has no effect on the direction of XOMA Corp i.e., XOMA Corp and Third Harmonic go up and down completely randomly.
Pair Corralation between XOMA Corp and Third Harmonic
Given the investment horizon of 90 days XOMA Corp is expected to generate 0.73 times more return on investment than Third Harmonic. However, XOMA Corp is 1.38 times less risky than Third Harmonic. It trades about 0.05 of its potential returns per unit of risk. Third Harmonic Bio is currently generating about 0.03 per unit of risk. If you would invest 1,900 in XOMA Corp on August 31, 2024 and sell it today you would earn a total of 1,417 from holding XOMA Corp or generate 74.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XOMA Corp vs. Third Harmonic Bio
Performance |
| Timeline |
| XOMA Corp |
| Third Harmonic Bio |
XOMA Corp and Third Harmonic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XOMA Corp and Third Harmonic
The main advantage of trading using opposite XOMA Corp and Third Harmonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XOMA Corp position performs unexpectedly, Third Harmonic 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 Third Harmonic will offset losses from the drop in Third Harmonic's long position.| XOMA Corp vs. Werewolf Therapeutics | XOMA Corp vs. Edgewise Therapeutics | XOMA Corp vs. Celcuity LLC | XOMA Corp vs. C4 Therapeutics |
| Third Harmonic vs. Sensei Biotherapeutics | Third Harmonic vs. NextCure | Third Harmonic vs. Nuvation Bio | Third Harmonic vs. Cullinan Oncology LLC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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