Correlation Between Xlife Sciences and Galenica Sante

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

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

Diversification Opportunities for Xlife Sciences and Galenica Sante

-0.74

Correlation Coefficient

Xlife Sciences  Galenica Sante

Pay attention - limited upside

The 3 months correlation between Xlife and Galenica is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Xlife Sciences AG and Galenica Sante AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galenica Sante AG and Xlife Sciences 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 Xlife Sciences AG are associated (or correlated) with Galenica Sante. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galenica Sante AG has no effect on the direction of Xlife Sciences i.e., Xlife Sciences and Galenica Sante go up and down completely randomly.

Pair Corralation between Xlife Sciences and Galenica Sante

Assuming the 90 days trading horizon Xlife Sciences AG is expected to under-perform the Galenica Sante. In addition to that, Xlife Sciences is 3.81 times more volatile than Galenica Sante AG. It trades about -0.01 of its total potential returns per unit of risk. Galenica Sante AG is currently generating about 0.11 per unit of volatility. If you would invest  7,435  in Galenica Sante AG on December 30, 2024 and sell it today you would earn a total of  555.00  from holding Galenica Sante AG or generate 7.46% return on investment over 90 days.

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

Xlife Sciences AG  vs.  Galenica Sante AG

Xlife Sciences AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xlife Sciences AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Xlife Sciences is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Galenica Sante AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Galenica Sante AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Galenica Sante may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Xlife Sciences and Galenica Sante

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

The idea behind Xlife Sciences AG and Galenica Sante AG 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 Stocks Directory module to find actively traded stocks across global markets.