Correlation Between Celcuity LLC and Xilio Development

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

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

Diversification Opportunities for Celcuity LLC and Xilio Development

0.27

Correlation Coefficient

Celcuity LLC  Xilio Development

Modest diversification

The 3 months correlation between Celcuity and Xilio is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Celcuity LLC and Xilio Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilio Development and Celcuity LLC 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 Celcuity LLC are associated (or correlated) with Xilio Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilio Development has no effect on the direction of Celcuity LLC i.e., Celcuity LLC and Xilio Development go up and down completely randomly.

Pair Corralation between Celcuity LLC and Xilio Development

Given the investment horizon of 90 days Celcuity LLC is expected to under-perform the Xilio Development. But the stock apears to be less risky and, when comparing its historical volatility, Celcuity LLC is 4.11 times less risky than Xilio Development. The stock trades about -0.07 of its potential returns per unit of risk. The Xilio Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  97.00  in Xilio Development on December 28, 2024 and sell it today you would lose (22.40) from holding Xilio Development or give up 23.09% of portfolio value over 90 days.

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

Celcuity LLC  vs.  Xilio Development

Celcuity LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Celcuity LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Xilio Development

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xilio Development are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Xilio Development displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celcuity LLC and Xilio Development

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

The idea behind Celcuity LLC and Xilio Development 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.