Correlation Between Ikena Oncology and Xilio Development
Can any of the company-specific risk be diversified away by investing in both Ikena Oncology and Xilio Development 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 Ikena Oncology and Xilio Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ikena Oncology and Xilio Development, you can compare the effects of market volatilities on Ikena Oncology and Xilio Development 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 Ikena Oncology with a short position of Xilio Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ikena Oncology and Xilio Development.
Diversification Opportunities for Ikena Oncology and Xilio Development
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ikena and Xilio is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and Xilio Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilio Development and Ikena Oncology 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 Ikena Oncology are associated (or correlated) with Xilio Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilio Development has no effect on the direction of Ikena Oncology i.e., Ikena Oncology and Xilio Development go up and down completely randomly.
Pair Corralation between Ikena Oncology and Xilio Development
Given the investment horizon of 90 days Ikena Oncology is expected to under-perform the Xilio Development. But the stock apears to be less risky and, when comparing its historical volatility, Ikena Oncology is 7.13 times less risky than Xilio Development. The stock trades about -0.09 of its potential returns per unit of risk. The Xilio Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 74.00 in Xilio Development on December 1, 2024 and sell it today you would earn a total of 17.00 from holding Xilio Development or generate 22.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ikena Oncology vs. Xilio Development
Performance |
Timeline |
Ikena Oncology |
Xilio Development |
Ikena Oncology and Xilio Development Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ikena Oncology and Xilio Development
The main advantage of trading using opposite Ikena Oncology and Xilio Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikena Oncology position performs unexpectedly, Xilio Development 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 Xilio Development will offset losses from the drop in Xilio Development's long position.Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Monte Rosa Therapeutics |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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