Correlation Between Charles River and Exagen

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

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

Diversification Opportunities for Charles River and Exagen

0.63

Correlation Coefficient

Charles River  Exagen

Poor diversification

The 3 months correlation between Charles and Exagen is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Charles River Laboratories and Exagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exagen Inc and Charles River 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 Charles River Laboratories are associated (or correlated) with Exagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exagen Inc has no effect on the direction of Charles River i.e., Charles River and Exagen go up and down completely randomly.

Pair Corralation between Charles River and Exagen

Considering the 90-day investment horizon Charles River Laboratories is expected to generate 0.86 times more return on investment than Exagen. However, Charles River Laboratories is 1.16 times less risky than Exagen. It trades about 0.19 of its potential returns per unit of risk. Exagen Inc is currently generating about 0.15 per unit of risk. If you would invest  11,541  in Charles River Laboratories on May 6, 2025 and sell it today you would earn a total of  4,999  from holding Charles River Laboratories or generate 43.32% return on investment over 90 days.

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

Charles River Laboratories  vs.  Exagen Inc

Charles River Labora

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Charles River Laboratories are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Charles River disclosed solid returns over the last few months and may actually be approaching a breakup point.

Exagen Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Charles River and Exagen

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

The idea behind Charles River Laboratories and Exagen Inc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.