Correlation Between CytomX Therapeutics and Instil Bio

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

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

Diversification Opportunities for CytomX Therapeutics and Instil Bio

0.16

Correlation Coefficient

CytomX Therapeutics  Instil Bio

Average diversification

The 3 months correlation between CytomX and Instil is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CytomX Therapeutics and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and CytomX Therapeutics 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 CytomX Therapeutics are associated (or correlated) with Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of CytomX Therapeutics i.e., CytomX Therapeutics and Instil Bio go up and down completely randomly.

Pair Corralation between CytomX Therapeutics and Instil Bio

Given the investment horizon of 90 days CytomX Therapeutics is expected to generate 2.36 times less return on investment than Instil Bio. In addition to that, CytomX Therapeutics is 1.5 times more volatile than Instil Bio. It trades about 0.01 of its total potential returns per unit of risk. Instil Bio is currently generating about 0.04 per unit of volatility. If you would invest  1,510  in Instil Bio on November 21, 2024 and sell it today you would earn a total of  841.00  from holding Instil Bio or generate 55.7% return on investment over 90 days.

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

CytomX Therapeutics  vs.  Instil Bio

CytomX Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days CytomX Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, CytomX Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Instil Bio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Instil Bio may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with CytomX Therapeutics and Instil Bio

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

The idea behind CytomX Therapeutics and Instil Bio 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.