Correlation Between Cadus and Xencor

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Can any of the company-specific risk be diversified away by investing in both Cadus and Xencor 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 Cadus and Xencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadus and Xencor Inc, you can compare the effects of market volatilities on Cadus and Xencor 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 Cadus with a short position of Xencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadus and Xencor.

Diversification Opportunities for Cadus and Xencor

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cadus and Xencor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cadus and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc and Cadus 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 Cadus are associated (or correlated) with Xencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xencor Inc has no effect on the direction of Cadus i.e., Cadus and Xencor go up and down completely randomly.

Pair Corralation between Cadus and Xencor

If you would invest (100.00) in Cadus on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Cadus or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Cadus  vs.  Xencor Inc

 Performance 
       Timeline  
Cadus 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Cadus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cadus is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
Xencor Inc 

Risk-Adjusted Performance

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Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Xencor Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Xencor may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Cadus and Xencor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cadus and Xencor

The main advantage of trading using opposite Cadus and Xencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadus position performs unexpectedly, Xencor 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 Xencor will offset losses from the drop in Xencor's long position.
The idea behind Cadus and Xencor 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.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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