Correlation Between C Rad and Xbrane Biopharma

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

By analyzing existing cross correlation between C Rad AB and Xbrane Biopharma AB, you can compare the effects of market volatilities on C Rad and Xbrane Biopharma 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 C Rad with a short position of Xbrane Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Rad and Xbrane Biopharma.

Diversification Opportunities for C Rad and Xbrane Biopharma

-0.24

Correlation Coefficient

C Rad  Xbrane Biopharma

Very good diversification

The 3 months correlation between CRAD-B and Xbrane is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding C Rad AB and Xbrane Biopharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xbrane Biopharma and C Rad 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 C Rad AB are associated (or correlated) with Xbrane Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xbrane Biopharma has no effect on the direction of C Rad i.e., C Rad and Xbrane Biopharma go up and down completely randomly.

Pair Corralation between C Rad and Xbrane Biopharma

Assuming the 90 days trading horizon C Rad AB is expected to generate 0.4 times more return on investment than Xbrane Biopharma. However, C Rad AB is 2.49 times less risky than Xbrane Biopharma. It trades about 0.21 of its potential returns per unit of risk. Xbrane Biopharma AB is currently generating about -0.23 per unit of risk. If you would invest  2,775  in C Rad AB on September 22, 2024 and sell it today you would earn a total of  200.00  from holding C Rad AB or generate 7.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

C Rad AB  vs.  Xbrane Biopharma AB

C Rad AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C Rad AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Xbrane Biopharma

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xbrane Biopharma AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Xbrane Biopharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with C Rad and Xbrane Biopharma

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

The idea behind C Rad AB and Xbrane Biopharma AB 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.