Correlation Between Exagen and Arvinas

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

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

Diversification Opportunities for Exagen and Arvinas

-0.76

Correlation Coefficient

Exagen  Arvinas

Pay attention - limited upside

The 3 months correlation between Exagen and Arvinas is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and Arvinas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arvinas and Exagen 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 Exagen Inc are associated (or correlated) with Arvinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arvinas has no effect on the direction of Exagen i.e., Exagen and Arvinas go up and down completely randomly.

Pair Corralation between Exagen and Arvinas

Considering the 90-day investment horizon Exagen Inc is expected to under-perform the Arvinas. In addition to that, Exagen is 2.36 times more volatile than Arvinas. It trades about -0.15 of its total potential returns per unit of risk. Arvinas is currently generating about -0.35 per unit of volatility. If you would invest  2,539  in Arvinas on October 5, 2024 and sell it today you would lose (650.00) from holding Arvinas or give up 25.6% of portfolio value over 90 days.

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

Exagen Inc  vs.  Arvinas

Exagen Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen displayed solid returns over the last few months and may actually be approaching a breakup point.

Arvinas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arvinas 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 basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Exagen and Arvinas

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

The idea behind Exagen Inc and Arvinas 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.