Correlation Between XOMA Corp and Immunomedics

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

By analyzing existing cross correlation between XOMA Corp and Immunomedics, you can compare the effects of market volatilities on XOMA Corp and Immunomedics 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 Immunomedics. Check out your portfolio center. Please also check ongoing floating volatility patterns of XOMA Corp and Immunomedics.

Diversification Opportunities for XOMA Corp and Immunomedics

0.0

Correlation Coefficient

XOMA Corp  Immunomedics

Pay attention - limited upside

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

Pair Corralation between XOMA Corp and Immunomedics

If you would invest  2,400  in XOMA Corp on January 24, 2024 and sell it today you would earn a total of  182.00  from holding XOMA Corp or generate 7.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

XOMA Corp  vs.  Immunomedics

XOMA Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in XOMA Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, XOMA Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Immunomedics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with XOMA Corp and Immunomedics

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

The idea behind XOMA Corp and Immunomedics 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.