Correlation Between PepGen and Exagen

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

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

Diversification Opportunities for PepGen and Exagen

-0.47

Correlation Coefficient

PepGen  Exagen

Very good diversification

The 3 months correlation between PepGen and Exagen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Exagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exagen Inc and PepGen 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 PepGen are associated (or correlated) with Exagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exagen Inc has no effect on the direction of PepGen i.e., PepGen and Exagen go up and down completely randomly.

Pair Corralation between PepGen and Exagen

Given the investment horizon of 90 days PepGen is expected to under-perform the Exagen. In addition to that, PepGen is 1.78 times more volatile than Exagen Inc. It trades about -0.04 of its total potential returns per unit of risk. Exagen Inc is currently generating about 0.02 per unit of volatility. If you would invest  428.00  in Exagen Inc on December 28, 2024 and sell it today you would lose (44.00) from holding Exagen Inc or give up 10.28% of portfolio value over 90 days.

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

PepGen  vs.  Exagen Inc

PepGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days PepGen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Exagen Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PepGen and Exagen

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

The idea behind PepGen and Exagen 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.