Correlation Between XOMA Corp and Tempest Therapeutics
Can any of the company-specific risk be diversified away by investing in both XOMA Corp and Tempest 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 XOMA Corp and Tempest Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XOMA Corp and Tempest Therapeutics, you can compare the effects of market volatilities on XOMA Corp and Tempest 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 XOMA Corp with a short position of Tempest Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of XOMA Corp and Tempest Therapeutics.
Diversification Opportunities for XOMA Corp and Tempest Therapeutics
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XOMA and Tempest is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding XOMA Corp and Tempest Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempest Therapeutics 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 Tempest Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempest Therapeutics has no effect on the direction of XOMA Corp i.e., XOMA Corp and Tempest Therapeutics go up and down completely randomly.
Pair Corralation between XOMA Corp and Tempest Therapeutics
Given the investment horizon of 90 days XOMA Corp is expected to generate 0.51 times more return on investment than Tempest Therapeutics. However, XOMA Corp is 1.97 times less risky than Tempest Therapeutics. It trades about 0.11 of its potential returns per unit of risk. Tempest Therapeutics is currently generating about -0.11 per unit of risk. If you would invest 2,692 in XOMA Corp on August 25, 2024 and sell it today you would earn a total of 328.00 from holding XOMA Corp or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XOMA Corp vs. Tempest Therapeutics
Performance |
| Timeline |
| XOMA Corp |
| Tempest Therapeutics |
XOMA Corp and Tempest Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XOMA Corp and Tempest Therapeutics
The main advantage of trading using opposite XOMA Corp and Tempest Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XOMA Corp position performs unexpectedly, Tempest 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 Tempest Therapeutics will offset losses from the drop in Tempest Therapeutics' long position.| XOMA Corp vs. Werewolf Therapeutics | XOMA Corp vs. Edgewise Therapeutics | XOMA Corp vs. Celcuity LLC | XOMA Corp vs. C4 Therapeutics |
| Tempest Therapeutics vs. Eliem Therapeutics | Tempest Therapeutics vs. HCW Biologics | Tempest Therapeutics vs. Scpharmaceuticals | Tempest Therapeutics vs. Milestone Pharmaceuticals |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |