Correlation Between Xometry and MorphoSys

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

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

Diversification Opportunities for Xometry and MorphoSys

-0.52

Correlation Coefficient

Xometry  MorphoSys

Excellent diversification

The 3 months correlation between Xometry and MorphoSys is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Xometry and MorphoSys AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MorphoSys AG ADR and Xometry 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 Xometry are associated (or correlated) with MorphoSys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MorphoSys AG ADR has no effect on the direction of Xometry i.e., Xometry and MorphoSys go up and down completely randomly.

Pair Corralation between Xometry and MorphoSys

If you would invest  3,100  in Xometry on September 28, 2024 and sell it today you would earn a total of  1,283  from holding Xometry or generate 41.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Xometry  vs.  MorphoSys AG ADR

Xometry

Risk-Adjusted Performance

25 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Xometry are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Xometry reported solid returns over the last few months and may actually be approaching a breakup point.

MorphoSys AG ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MorphoSys AG ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, MorphoSys is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Xometry and MorphoSys

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

The idea behind Xometry and MorphoSys AG ADR 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.