Correlation Between Adicet Bio and XBiotech

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

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

Diversification Opportunities for Adicet Bio and XBiotech

-0.4

Correlation Coefficient

Adicet Bio  XBiotech

Very good diversification

The 3 months correlation between Adicet and XBiotech is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Adicet Bio and XBiotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBiotech and Adicet Bio 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 Adicet Bio are associated (or correlated) with XBiotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBiotech has no effect on the direction of Adicet Bio i.e., Adicet Bio and XBiotech go up and down completely randomly.

Pair Corralation between Adicet Bio and XBiotech

Given the investment horizon of 90 days Adicet Bio is expected to generate 1.34 times more return on investment than XBiotech. However, Adicet Bio is 1.34 times more volatile than XBiotech. It trades about 0.04 of its potential returns per unit of risk. XBiotech is currently generating about -0.03 per unit of risk. If you would invest  66.00  in Adicet Bio on August 15, 2025 and sell it today you would earn a total of  3.00  from holding Adicet Bio or generate 4.55% return on investment over 90 days.

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

Adicet Bio  vs.  XBiotech

Adicet Bio

Risk-Adjusted Performance

Soft

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

XBiotech

Risk-Adjusted Performance

Weakest

Over the last 90 days XBiotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward 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 Adicet Bio and XBiotech

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

The idea behind Adicet Bio and XBiotech 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.