Correlation Between X4 Pharmaceuticals and Geron

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

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

Diversification Opportunities for X4 Pharmaceuticals and Geron

0.82

Correlation Coefficient

X4 Pharmaceuticals  Geron

Very poor diversification

The 3 months correlation between XFOR and Geron is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding X4 Pharmaceuticals and Geron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geron 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 Geron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geron has no effect on the direction of X4 Pharmaceuticals i.e., X4 Pharmaceuticals and Geron go up and down completely randomly.

Pair Corralation between X4 Pharmaceuticals and Geron

Given the investment horizon of 90 days X4 Pharmaceuticals is expected to under-perform the Geron. In addition to that, X4 Pharmaceuticals is 3.65 times more volatile than Geron. It trades about -0.02 of its total potential returns per unit of risk. Geron is currently generating about -0.02 per unit of volatility. If you would invest  440.00  in Geron on August 31, 2024 and sell it today you would lose (23.00) from holding Geron or give up 5.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

X4 Pharmaceuticals  vs.  Geron

X4 Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days X4 Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Geron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Geron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Geron is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with X4 Pharmaceuticals and Geron

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

The idea behind X4 Pharmaceuticals and Geron 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.