Correlation Between Stille AB and Xbrane Biopharma

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

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

Diversification Opportunities for Stille AB and Xbrane Biopharma

0.32

Correlation Coefficient

Stille AB  Xbrane Biopharma

Weak diversification

The 3 months correlation between Stille and Xbrane is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Stille AB and Xbrane Biopharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xbrane Biopharma and Stille AB 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 Stille AB are associated (or correlated) with Xbrane Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xbrane Biopharma has no effect on the direction of Stille AB i.e., Stille AB and Xbrane Biopharma go up and down completely randomly.

Pair Corralation between Stille AB and Xbrane Biopharma

Assuming the 90 days trading horizon Stille AB is expected to under-perform the Xbrane Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, Stille AB is 2.2 times less risky than Xbrane Biopharma. The stock trades about -0.04 of its potential returns per unit of risk. The Xbrane Biopharma AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Xbrane Biopharma AB on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Xbrane Biopharma AB or generate 0.0% return on investment over 90 days.

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

Stille AB  vs.  Xbrane Biopharma AB

Stille AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stille AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Xbrane Biopharma

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xbrane Biopharma AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Xbrane Biopharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Stille AB and Xbrane Biopharma

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

The idea behind Stille AB and Xbrane Biopharma AB 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 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.