Correlation Between CytomX Therapeutics and Autolus Therapeutics

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

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

Diversification Opportunities for CytomX Therapeutics and Autolus Therapeutics

0.76

Correlation Coefficient

CytomX Therapeutics  Autolus Therapeutics

Poor diversification

The 3 months correlation between CytomX and Autolus is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CytomX Therapeutics and Autolus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autolus Therapeutics and CytomX Therapeutics 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 CytomX Therapeutics are associated (or correlated) with Autolus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autolus Therapeutics has no effect on the direction of CytomX Therapeutics i.e., CytomX Therapeutics and Autolus Therapeutics go up and down completely randomly.

Pair Corralation between CytomX Therapeutics and Autolus Therapeutics

Given the investment horizon of 90 days CytomX Therapeutics is expected to generate 1.08 times more return on investment than Autolus Therapeutics. However, CytomX Therapeutics is 1.08 times more volatile than Autolus Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Autolus Therapeutics is currently generating about -0.12 per unit of risk. If you would invest  85.00  in CytomX Therapeutics on January 28, 2025 and sell it today you would lose (11.43) from holding CytomX Therapeutics or give up 13.45% of portfolio value over 90 days.

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

CytomX Therapeutics  vs.  Autolus Therapeutics

CytomX Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days CytomX Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, CytomX Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Autolus Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Autolus Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with CytomX Therapeutics and Autolus Therapeutics

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

The idea behind CytomX Therapeutics and Autolus Therapeutics 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.