Correlation Between FIXX Old and Halozyme Therapeutics

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

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

Diversification Opportunities for FIXX Old and Halozyme Therapeutics

0.26

Correlation Coefficient

FIXX Old  Halozyme Therapeutics

Modest diversification

The 3 months correlation between FIXX and Halozyme is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding FIXX Old and Halozyme Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halozyme Therapeutics and FIXX Old 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 FIXX Old are associated (or correlated) with Halozyme Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halozyme Therapeutics has no effect on the direction of FIXX Old i.e., FIXX Old and Halozyme Therapeutics go up and down completely randomly.

Pair Corralation between FIXX Old and Halozyme Therapeutics

Given the investment horizon of 90 days FIXX Old is expected to generate 1.57 times more return on investment than Halozyme Therapeutics. However, FIXX Old is 1.57 times more volatile than Halozyme Therapeutics. It trades about 0.32 of its potential returns per unit of risk. Halozyme Therapeutics is currently generating about 0.05 per unit of risk. If you would invest  89.00  in FIXX Old on October 22, 2024 and sell it today you would earn a total of  20.00  from holding FIXX Old or generate 22.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.35%
Values	Daily Returns

FIXX Old  vs.  Halozyme Therapeutics

FIXX Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Halozyme Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Halozyme Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Halozyme Therapeutics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FIXX Old and Halozyme Therapeutics

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

The idea behind FIXX Old and Halozyme Therapeutics 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.