Correlation Between Alpha Tau and Exagen

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

By analyzing existing cross correlation between Alpha Tau Medical and Exagen Inc, you can compare the effects of market volatilities on Alpha Tau and Exagen 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 Alpha Tau with a short position of Exagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Tau and Exagen.

Diversification Opportunities for Alpha Tau and Exagen

0.05

Correlation Coefficient

Alpha Tau  Exagen

Significant diversification

The 3 months correlation between Alpha and Exagen is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Tau Medical and Exagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exagen Inc and Alpha Tau 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 Alpha Tau Medical are associated (or correlated) with Exagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exagen Inc has no effect on the direction of Alpha Tau i.e., Alpha Tau and Exagen go up and down completely randomly.

Pair Corralation between Alpha Tau and Exagen

Given the investment horizon of 90 days Alpha Tau Medical is expected to under-perform the Exagen. But the stock apears to be less risky and, when comparing its historical volatility, Alpha Tau Medical is 2.02 times less risky than Exagen. The stock trades about -0.05 of its potential returns per unit of risk. The Exagen Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  515.00  in Exagen Inc on December 20, 2024 and sell it today you would lose (140.00) from holding Exagen Inc or give up 27.18% of portfolio value over 90 days.

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

Alpha Tau Medical  vs.  Exagen Inc

Alpha Tau Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha Tau Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Exagen Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exagen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alpha Tau and Exagen

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

The idea behind Alpha Tau Medical and Exagen Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.