Correlation Between XOMA Corp and Star Equity
Can any of the company-specific risk be diversified away by investing in both XOMA Corp and Star Equity 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 Star Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XOMA Corp and Star Equity Holdings, you can compare the effects of market volatilities on XOMA Corp and Star Equity 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 Star Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of XOMA Corp and Star Equity.
Diversification Opportunities for XOMA Corp and Star Equity
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XOMA and Star is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding XOMA Corp and Star Equity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Equity Holdings 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 Star Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Equity Holdings has no effect on the direction of XOMA Corp i.e., XOMA Corp and Star Equity go up and down completely randomly.
Pair Corralation between XOMA Corp and Star Equity
Assuming the 90 days horizon XOMA Corp is expected to generate 0.29 times more return on investment than Star Equity. However, XOMA Corp is 3.46 times less risky than Star Equity. It trades about 0.05 of its potential returns per unit of risk. Star Equity Holdings is currently generating about -0.01 per unit of risk. If you would invest 2,079 in XOMA Corp on August 31, 2024 and sell it today you would earn a total of 514.00 from holding XOMA Corp or generate 24.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XOMA Corp vs. Star Equity Holdings
Performance |
| Timeline |
| XOMA Corp |
| Star Equity Holdings |
XOMA Corp and Star Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XOMA Corp and Star Equity
The main advantage of trading using opposite XOMA Corp and Star Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XOMA Corp position performs unexpectedly, Star Equity 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 Star Equity will offset losses from the drop in Star Equity's long position.The idea behind XOMA Corp and Star Equity Holdings 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.| Star Equity vs. Volitionrx | Star Equity vs. Biodesix | Star Equity vs. Fonar | Star Equity vs. Burning Rock Biotech |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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