Correlation Between IQVIA Holdings and Xencor

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

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

Diversification Opportunities for IQVIA Holdings and Xencor

-0.78

Correlation Coefficient

IQVIA Holdings  Xencor

Pay attention - limited upside

The 3 months correlation between IQVIA and Xencor is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding IQVIA Holdings and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc and IQVIA Holdings 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 IQVIA Holdings are associated (or correlated) with Xencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xencor Inc has no effect on the direction of IQVIA Holdings i.e., IQVIA Holdings and Xencor go up and down completely randomly.

Pair Corralation between IQVIA Holdings and Xencor

Considering the 90-day investment horizon IQVIA Holdings is expected to under-perform the Xencor. But the stock apears to be less risky and, when comparing its historical volatility, IQVIA Holdings is 1.7 times less risky than Xencor. The stock trades about -0.01 of its potential returns per unit of risk. The Xencor Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,830  in Xencor Inc on October 4, 2024 and sell it today you would lose (448.00) from holding Xencor Inc or give up 15.83% of portfolio value over 90 days.

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

IQVIA Holdings  vs.  Xencor Inc

IQVIA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Xencor Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xencor Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Xencor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IQVIA Holdings and Xencor

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

The idea behind IQVIA Holdings and Xencor Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.