Correlation Between XOMA and Sohm
Can any of the company-specific risk be diversified away by investing in both XOMA and Sohm 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 and Sohm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XOMA Corporation and Sohm Inc, you can compare the effects of market volatilities on XOMA and Sohm 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 with a short position of Sohm. Check out your portfolio center. Please also check ongoing floating volatility patterns of XOMA and Sohm.
Diversification Opportunities for XOMA and Sohm
Very good diversification
The 3 months correlation between XOMA and Sohm is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding XOMA Corp. and Sohm Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sohm Inc and XOMA 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 Corporation are associated (or correlated) with Sohm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sohm Inc has no effect on the direction of XOMA i.e., XOMA and Sohm go up and down completely randomly.
Pair Corralation between XOMA and Sohm
If you would invest 0.08 in Sohm Inc on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Sohm Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
XOMA Corp. vs. Sohm Inc
Performance |
| Timeline |
| XOMA |
| Sohm Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
XOMA and Sohm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XOMA and Sohm
The main advantage of trading using opposite XOMA and Sohm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XOMA position performs unexpectedly, Sohm 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 Sohm will offset losses from the drop in Sohm's long position.The idea behind XOMA Corporation and Sohm Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |