Correlation Between Eguana Technologies and XOMA Corp

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

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

Diversification Opportunities for Eguana Technologies and XOMA Corp

0.15

Correlation Coefficient

Eguana Technologies  XOMA Corp

Average diversification

The 3 months correlation between Eguana and XOMA is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Eguana Technologies and XOMA Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA Corp and Eguana Technologies 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 Eguana Technologies are associated (or correlated) with XOMA Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XOMA Corp has no effect on the direction of Eguana Technologies i.e., Eguana Technologies and XOMA Corp go up and down completely randomly.

Pair Corralation between Eguana Technologies and XOMA Corp

Assuming the 90 days horizon Eguana Technologies is expected to generate 3.9 times more return on investment than XOMA Corp. However, Eguana Technologies is 3.9 times more volatile than XOMA Corp. It trades about 0.06 of its potential returns per unit of risk. XOMA Corp is currently generating about 0.05 per unit of risk. If you would invest  5.40  in Eguana Technologies on May 6, 2025 and sell it today you would earn a total of  0.01  from holding Eguana Technologies or generate 0.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.48%
Values	Daily Returns

Eguana Technologies  vs.  XOMA Corp

Eguana Technologies

Risk-Adjusted Performance

Insignificant

Over the last 90 days Eguana Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Eguana Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

XOMA Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XOMA Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, XOMA Corp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Eguana Technologies and XOMA Corp

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

The idea behind Eguana Technologies and XOMA Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.