Correlation Between Exicure and Equillium

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

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

Diversification Opportunities for Exicure and Equillium

-0.34

Correlation Coefficient

Exicure  Equillium

Very good diversification

The 3 months correlation between Exicure and Equillium is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Exicure and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium and Exicure 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 Exicure are associated (or correlated) with Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Exicure i.e., Exicure and Equillium go up and down completely randomly.

Pair Corralation between Exicure and Equillium

Given the investment horizon of 90 days Exicure is expected to generate 4.39 times less return on investment than Equillium. In addition to that, Exicure is 1.86 times more volatile than Equillium. It trades about 0.01 of its total potential returns per unit of risk. Equillium is currently generating about 0.09 per unit of volatility. If you would invest  60.00  in Equillium on December 22, 2024 and sell it today you would earn a total of  17.00  from holding Equillium or generate 28.33% return on investment over 90 days.

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

Exicure  vs.  Equillium

Exicure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exicure has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Exicure may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Equillium

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Equillium are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Equillium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exicure and Equillium

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

The idea behind Exicure and Equillium 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.