Correlation Between XOMA Corp and Ammo
Can any of the company-specific risk be diversified away by investing in both XOMA Corp and Ammo 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 Ammo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XOMA Corp and Ammo Inc, you can compare the effects of market volatilities on XOMA Corp and Ammo 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 Ammo. Check out your portfolio center. Please also check ongoing floating volatility patterns of XOMA Corp and Ammo.
Diversification Opportunities for XOMA Corp and Ammo
Pay attention - limited upside
The 3 months correlation between XOMA and Ammo is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding XOMA Corp and Ammo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ammo Inc 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 Ammo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ammo Inc has no effect on the direction of XOMA Corp i.e., XOMA Corp and Ammo go up and down completely randomly.
Pair Corralation between XOMA Corp and Ammo
Assuming the 90 days horizon XOMA Corp is expected to generate 0.19 times more return on investment than Ammo. However, XOMA Corp is 5.18 times less risky than Ammo. It trades about 0.08 of its potential returns per unit of risk. Ammo Inc is currently generating about -0.08 per unit of risk. If you would invest 2,484 in XOMA Corp on August 28, 2024 and sell it today you would earn a total of 91.00 from holding XOMA Corp or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XOMA Corp vs. Ammo Inc
Performance |
| Timeline |
| XOMA Corp |
| Ammo Inc |
XOMA Corp and Ammo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XOMA Corp and Ammo
The main advantage of trading using opposite XOMA Corp and Ammo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XOMA Corp position performs unexpectedly, Ammo 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 Ammo will offset losses from the drop in Ammo's long position.| XOMA Corp vs. Harrow Health 8625 | XOMA Corp vs. SiriusPoint | XOMA Corp vs. New York Mortgage | XOMA Corp vs. Sachem Capital Corp |
| Ammo vs. Sturm Ruger | Ammo vs. Kratos Defense Security | Ammo vs. VSE Corporation | Ammo vs. Smith Wesson Brands |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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