Correlation Between Genocea Biosciences and Xenon Pharmaceuticals

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

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

Diversification Opportunities for Genocea Biosciences and Xenon Pharmaceuticals

0.0

Correlation Coefficient

Genocea Biosciences  Xenon Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Genocea and Xenon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genocea Biosciences and Xenon Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenon Pharmaceuticals and Genocea Biosciences 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 Genocea Biosciences are associated (or correlated) with Xenon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenon Pharmaceuticals has no effect on the direction of Genocea Biosciences i.e., Genocea Biosciences and Xenon Pharmaceuticals go up and down completely randomly.

Pair Corralation between Genocea Biosciences and Xenon Pharmaceuticals

If you would invest (100.00) in Genocea Biosciences on October 7, 2024 and sell it today you would earn a total of  100.00  from holding Genocea Biosciences or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Genocea Biosciences  vs.  Xenon Pharmaceuticals

Genocea Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genocea Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Genocea Biosciences is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Xenon Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xenon Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Xenon Pharmaceuticals is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Genocea Biosciences and Xenon Pharmaceuticals

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

The idea behind Genocea Biosciences and Xenon Pharmaceuticals 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..