Correlation Between HCW Biologics and Exicure

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

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

Diversification Opportunities for HCW Biologics and Exicure

0.05

Correlation Coefficient

HCW Biologics  Exicure

Significant diversification

The 3 months correlation between HCW and Exicure is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding HCW Biologics and Exicure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exicure and HCW Biologics 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 HCW Biologics 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 HCW Biologics i.e., HCW Biologics and Exicure go up and down completely randomly.

Pair Corralation between HCW Biologics and Exicure

Given the investment horizon of 90 days HCW Biologics is expected to generate 1.25 times less return on investment than Exicure. In addition to that, HCW Biologics is 1.51 times more volatile than Exicure. It trades about 0.02 of its total potential returns per unit of risk. Exicure is currently generating about 0.04 per unit of volatility. If you would invest  1,615  in Exicure on December 28, 2024 and sell it today you would lose (215.00) from holding Exicure or give up 13.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

HCW Biologics  vs.  Exicure

HCW Biologics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HCW Biologics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, HCW Biologics sustained solid returns over the last few months and may actually be approaching a breakup point.

Exicure

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exicure are ranked lower than 2 (%) 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 HCW Biologics and Exicure

The main advantage of trading using opposite HCW Biologics and Exicure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCW Biologics 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 HCW Biologics 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.