Correlation Between Bolt Biotherapeutics and Xencor

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

By analyzing existing cross correlation between Bolt Biotherapeutics and Xencor Inc, you can compare the effects of market volatilities on Bolt Biotherapeutics 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 Bolt Biotherapeutics with a short position of Xencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolt Biotherapeutics and Xencor.

Diversification Opportunities for Bolt Biotherapeutics and Xencor

0.85

Correlation Coefficient

Bolt Biotherapeutics  Xencor

Very poor diversification

The 3 months correlation between Bolt and Xencor is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Biotherapeutics and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc and Bolt Biotherapeutics 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 Bolt Biotherapeutics 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 Bolt Biotherapeutics i.e., Bolt Biotherapeutics and Xencor go up and down completely randomly.

Pair Corralation between Bolt Biotherapeutics and Xencor

Given the investment horizon of 90 days Bolt Biotherapeutics is expected to generate 1.17 times more return on investment than Xencor. However, Bolt Biotherapeutics is 1.17 times more volatile than Xencor Inc. It trades about -0.06 of its potential returns per unit of risk. Xencor Inc is currently generating about -0.41 per unit of risk. If you would invest  52.00  in Bolt Biotherapeutics on December 27, 2024 and sell it today you would lose (8.00) from holding Bolt Biotherapeutics or give up 15.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Bolt Biotherapeutics  vs.  Xencor Inc

Bolt Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bolt Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Xencor Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xencor Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bolt Biotherapeutics and Xencor

The main advantage of trading using opposite Bolt Biotherapeutics and Xencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bolt Biotherapeutics 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 Bolt Biotherapeutics 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.