Correlation Between Regenxbio and Xencor

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

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

Diversification Opportunities for Regenxbio and Xencor

-0.21

Correlation Coefficient

Regenxbio  Xencor

Very good diversification

The 3 months correlation between Regenxbio and Xencor is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Regenxbio and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc and Regenxbio 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 Regenxbio 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 Regenxbio i.e., Regenxbio and Xencor go up and down completely randomly.

Pair Corralation between Regenxbio and Xencor

Given the investment horizon of 90 days Regenxbio is expected to under-perform the Xencor. In addition to that, Regenxbio is 2.41 times more volatile than Xencor Inc. It trades about -0.06 of its total potential returns per unit of risk. Xencor Inc is currently generating about 0.16 per unit of volatility. If you would invest  2,082  in Xencor Inc on September 12, 2024 and sell it today you would earn a total of  444.00  from holding Xencor Inc or generate 21.33% return on investment over 90 days.

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

Regenxbio  vs.  Xencor Inc

Regenxbio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regenxbio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Xencor Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xencor Inc are ranked lower than 12 (%) 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 Regenxbio and Xencor

The main advantage of trading using opposite Regenxbio and Xencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regenxbio 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 Regenxbio 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.