Correlation Between Durect and Zymeworks Common

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

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

Diversification Opportunities for Durect and Zymeworks Common

0.09

Correlation Coefficient

Durect  Zymeworks Common

Significant diversification

The 3 months correlation between Durect and Zymeworks is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Durect and Zymeworks Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zymeworks Common Stock and Durect 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 Durect are associated (or correlated) with Zymeworks Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zymeworks Common Stock has no effect on the direction of Durect i.e., Durect and Zymeworks Common go up and down completely randomly.

Pair Corralation between Durect and Zymeworks Common

Given the investment horizon of 90 days Durect is expected to generate 1.2 times more return on investment than Zymeworks Common. However, Durect is 1.2 times more volatile than Zymeworks Common Stock. It trades about -0.05 of its potential returns per unit of risk. Zymeworks Common Stock is currently generating about -0.06 per unit of risk. If you would invest  95.00  in Durect on December 27, 2024 and sell it today you would lose (14.00) from holding Durect or give up 14.74% of portfolio value over 90 days.

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

Durect  vs.  Zymeworks Common Stock

Durect

Risk-Adjusted Performance

Very Weak

Over the last 90 days Durect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent 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.

Zymeworks Common Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zymeworks Common Stock 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 primary 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.

Pair Trading with Durect and Zymeworks Common

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

The idea behind Durect and Zymeworks Common Stock 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.