Correlation Between Xeris Pharmaceuticals and Ensign

Can any of the company-specific risk be diversified away by investing in both Xeris Pharmaceuticals and Ensign 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 Xeris Pharmaceuticals and Ensign into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xeris Pharmaceuticals and The Ensign Group, you can compare the effects of market volatilities on Xeris Pharmaceuticals and Ensign 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 Xeris Pharmaceuticals with a short position of Ensign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xeris Pharmaceuticals and Ensign.

Diversification Opportunities for Xeris Pharmaceuticals and Ensign

0.56

Correlation Coefficient

Xeris Pharmaceuticals  Ensign

Very weak diversification

The 3 months correlation between Xeris and Ensign is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xeris Pharmaceuticals and The Ensign Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Group and Xeris Pharmaceuticals 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 Xeris Pharmaceuticals are associated (or correlated) with Ensign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Group has no effect on the direction of Xeris Pharmaceuticals i.e., Xeris Pharmaceuticals and Ensign go up and down completely randomly.

Pair Corralation between Xeris Pharmaceuticals and Ensign

Given the investment horizon of 90 days Xeris Pharmaceuticals is expected to generate 2.79 times more return on investment than Ensign. However, Xeris Pharmaceuticals is 2.79 times more volatile than The Ensign Group. It trades about 0.17 of its potential returns per unit of risk. The Ensign Group is currently generating about 0.01 per unit of risk. If you would invest  175.00  in Xeris Pharmaceuticals on February 27, 2024 and sell it today you would earn a total of  18.00  from holding Xeris Pharmaceuticals or generate 10.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Xeris Pharmaceuticals  vs.  The Ensign Group

Xeris Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xeris Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ensign Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Ensign Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ensign is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Xeris Pharmaceuticals and Ensign

The main advantage of trading using opposite Xeris Pharmaceuticals and Ensign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xeris Pharmaceuticals position performs unexpectedly, Ensign 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 Ensign will offset losses from the drop in Ensign's long position.

The idea behind Xeris Pharmaceuticals and The Ensign Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.