Correlation Between Centessa Pharmaceuticals and Exicure

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

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

Diversification Opportunities for Centessa Pharmaceuticals and Exicure

0.27

Correlation Coefficient

Centessa Pharmaceuticals  Exicure

Modest diversification

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

Pair Corralation between Centessa Pharmaceuticals and Exicure

Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to under-perform the Exicure. But the stock apears to be less risky and, when comparing its historical volatility, Centessa Pharmaceuticals PLC is 3.07 times less risky than Exicure. The stock trades about -0.03 of its potential returns per unit of risk. The Exicure is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,615  in Exicure on December 29, 2024 and sell it today you would lose (215.00) from holding Exicure or give up 13.31% of portfolio value over 90 days.

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

Centessa Pharmaceuticals PLC  vs.  Exicure

Centessa Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centessa Pharmaceuticals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Exicure

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exicure are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Exicure reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centessa Pharmaceuticals and Exicure

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

The idea behind Centessa Pharmaceuticals PLC and Exicure 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.