Correlation Between Exelixis and Venus Concept

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

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

Diversification Opportunities for Exelixis and Venus Concept

-0.78

Correlation Coefficient

Exelixis  Venus Concept

Pay attention - limited upside

The 3 months correlation between Exelixis and Venus is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Exelixis and Venus Concept in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Venus Concept and Exelixis 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 Exelixis are associated (or correlated) with Venus Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Venus Concept has no effect on the direction of Exelixis i.e., Exelixis and Venus Concept go up and down completely randomly.

Pair Corralation between Exelixis and Venus Concept

Given the investment horizon of 90 days Exelixis is expected to under-perform the Venus Concept. But the stock apears to be less risky and, when comparing its historical volatility, Exelixis is 3.32 times less risky than Venus Concept. The stock trades about -0.19 of its potential returns per unit of risk. The Venus Concept is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Venus Concept on October 6, 2024 and sell it today you would earn a total of  13.00  from holding Venus Concept or generate 43.33% return on investment over 90 days.

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

Exelixis  vs.  Venus Concept

Exelixis

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exelixis are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Exelixis disclosed solid returns over the last few months and may actually be approaching a breakup point.

Venus Concept

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Venus Concept are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Venus Concept may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Exelixis and Venus Concept

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

The idea behind Exelixis and Venus Concept 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.