Correlation Between X4 Pharmaceuticals and Dynavax Technologies

Can any of the company-specific risk be diversified away by investing in both X4 Pharmaceuticals and Dynavax Technologies 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 X4 Pharmaceuticals and Dynavax Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between X4 Pharmaceuticals and Dynavax Technologies, you can compare the effects of market volatilities on X4 Pharmaceuticals and Dynavax Technologies 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 X4 Pharmaceuticals with a short position of Dynavax Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of X4 Pharmaceuticals and Dynavax Technologies.

Diversification Opportunities for X4 Pharmaceuticals and Dynavax Technologies

0.19

Correlation Coefficient

X4 Pharmaceuticals  Dynavax Technologies

Average diversification

The 3 months correlation between XFOR and Dynavax is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding X4 Pharmaceuticals and Dynavax Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynavax Technologies and X4 Pharmaceuticals 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 X4 Pharmaceuticals are associated (or correlated) with Dynavax Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynavax Technologies has no effect on the direction of X4 Pharmaceuticals i.e., X4 Pharmaceuticals and Dynavax Technologies go up and down completely randomly.

Pair Corralation between X4 Pharmaceuticals and Dynavax Technologies

Given the investment horizon of 90 days X4 Pharmaceuticals is expected to under-perform the Dynavax Technologies. In addition to that, X4 Pharmaceuticals is 13.59 times more volatile than Dynavax Technologies. It trades about -0.03 of its total potential returns per unit of risk. Dynavax Technologies is currently generating about -0.16 per unit of volatility. If you would invest  1,296  in Dynavax Technologies on October 14, 2024 and sell it today you would lose (33.00) from holding Dynavax Technologies or give up 2.55% of portfolio value over 90 days.

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

X4 Pharmaceuticals  vs.  Dynavax Technologies

X4 Pharmaceuticals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in X4 Pharmaceuticals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, X4 Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Dynavax Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dynavax Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Dynavax Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X4 Pharmaceuticals and Dynavax Technologies

The main advantage of trading using opposite X4 Pharmaceuticals and Dynavax Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X4 Pharmaceuticals position performs unexpectedly, Dynavax Technologies 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 Dynavax Technologies will offset losses from the drop in Dynavax Technologies' long position.

The idea behind X4 Pharmaceuticals and Dynavax Technologies 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.