Correlation Between Xlife Sciences and St Galler

Can any of the company-specific risk be diversified away by investing in both Xlife Sciences and St Galler 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 St Galler 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 St Galler Kantonalbank, you can compare the effects of market volatilities on Xlife Sciences and St Galler 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 St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xlife Sciences and St Galler.

Diversification Opportunities for Xlife Sciences and St Galler

-0.42

Correlation Coefficient

Xlife Sciences  St Galler

Very good diversification

The 3 months correlation between Xlife and SGKN is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Xlife Sciences AG and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank 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 St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Xlife Sciences i.e., Xlife Sciences and St Galler go up and down completely randomly.

Pair Corralation between Xlife Sciences and St Galler

Assuming the 90 days trading horizon Xlife Sciences AG is expected to generate 6.7 times more return on investment than St Galler. However, Xlife Sciences is 6.7 times more volatile than St Galler Kantonalbank. It trades about 0.06 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about 0.02 per unit of risk. If you would invest  2,490  in Xlife Sciences AG on September 2, 2024 and sell it today you would earn a total of  280.00  from holding Xlife Sciences AG or generate 11.24% return on investment over 90 days.

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

Xlife Sciences AG  vs.  St Galler Kantonalbank

Xlife Sciences AG

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xlife Sciences AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Xlife Sciences showed solid returns over the last few months and may actually be approaching a breakup point.

St Galler Kantonalbank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, St Galler is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Xlife Sciences and St Galler

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

The idea behind Xlife Sciences AG and St Galler Kantonalbank 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.