Correlation Between X4 Pharmaceuticals and Generation Bio

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both X4 Pharmaceuticals and Generation Bio 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 Generation Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X4 Pharmaceuticals and Generation Bio Co, you can compare the effects of market volatilities on X4 Pharmaceuticals and Generation Bio 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 Generation Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of X4 Pharmaceuticals and Generation Bio.

Diversification Opportunities for X4 Pharmaceuticals and Generation Bio

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between XFOR and Generation is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding X4 Pharmaceuticals and Generation Bio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Bio 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 Generation Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Bio has no effect on the direction of X4 Pharmaceuticals i.e., X4 Pharmaceuticals and Generation Bio go up and down completely randomly.

Pair Corralation between X4 Pharmaceuticals and Generation Bio

Given the investment horizon of 90 days X4 Pharmaceuticals is expected to generate 1.04 times more return on investment than Generation Bio. However, X4 Pharmaceuticals is 1.04 times more volatile than Generation Bio Co. It trades about 0.02 of its potential returns per unit of risk. Generation Bio Co is currently generating about -0.01 per unit of risk. If you would invest  109.00  in X4 Pharmaceuticals on September 26, 2024 and sell it today you would lose (51.00) from holding X4 Pharmaceuticals or give up 46.79% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

X4 Pharmaceuticals  vs.  Generation Bio Co

 Performance 
       Timeline  
X4 Pharmaceuticals 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in X4 Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, X4 Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.
Generation Bio 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Generation Bio Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

X4 Pharmaceuticals and Generation Bio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with X4 Pharmaceuticals and Generation Bio

The main advantage of trading using opposite X4 Pharmaceuticals and Generation Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X4 Pharmaceuticals position performs unexpectedly, Generation Bio 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 Generation Bio will offset losses from the drop in Generation Bio's long position.
The idea behind X4 Pharmaceuticals and Generation Bio Co 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios