Correlation Between Xencor and Bolt Biotherapeutics

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

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

Diversification Opportunities for Xencor and Bolt Biotherapeutics

0.84

Correlation Coefficient

Xencor  Bolt Biotherapeutics

Very poor diversification

The 3 months correlation between Xencor and Bolt is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Xencor Inc and Bolt Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolt Biotherapeutics and Xencor 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 Xencor Inc are associated (or correlated) with Bolt Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolt Biotherapeutics has no effect on the direction of Xencor i.e., Xencor and Bolt Biotherapeutics go up and down completely randomly.

Pair Corralation between Xencor and Bolt Biotherapeutics

Given the investment horizon of 90 days Xencor Inc is expected to under-perform the Bolt Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Xencor Inc is 1.24 times less risky than Bolt Biotherapeutics. The stock trades about -0.36 of its potential returns per unit of risk. The Bolt Biotherapeutics is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Bolt Biotherapeutics on December 25, 2024 and sell it today you would lose (7.00) from holding Bolt Biotherapeutics or give up 13.73% of portfolio value over 90 days.

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

Xencor Inc  vs.  Bolt Biotherapeutics

Xencor Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xencor Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Bolt Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bolt Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Xencor and Bolt Biotherapeutics

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

The idea behind Xencor Inc and Bolt Biotherapeutics 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.