Correlation Between Halozyme Therapeutics and Exicure

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

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

Diversification Opportunities for Halozyme Therapeutics and Exicure

-0.5

Correlation Coefficient

Halozyme Therapeutics  Exicure

Very good diversification

The 3 months correlation between Halozyme and Exicure is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Halozyme Therapeutics and Exicure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exicure and Halozyme Therapeutics 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 Halozyme Therapeutics are associated (or correlated) with Exicure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exicure has no effect on the direction of Halozyme Therapeutics i.e., Halozyme Therapeutics and Exicure go up and down completely randomly.

Pair Corralation between Halozyme Therapeutics and Exicure

Given the investment horizon of 90 days Halozyme Therapeutics is expected to under-perform the Exicure. But the stock apears to be less risky and, when comparing its historical volatility, Halozyme Therapeutics is 12.25 times less risky than Exicure. The stock trades about -0.03 of its potential returns per unit of risk. The Exicure is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,400  in Exicure on October 4, 2024 and sell it today you would lose (33.00) from holding Exicure or give up 2.36% of portfolio value over 90 days.

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

Halozyme Therapeutics  vs.  Exicure

Halozyme Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Halozyme Therapeutics 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 essential indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Exicure

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Exicure are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Exicure reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Halozyme Therapeutics and Exicure

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

The idea behind Halozyme Therapeutics and Exicure 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.