Correlation Between Supercom and Xenetic Biosciences

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

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

Diversification Opportunities for Supercom and Xenetic Biosciences

0.26

Correlation Coefficient

Supercom  Xenetic Biosciences

Modest diversification

The 3 months correlation between Supercom and Xenetic is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Xenetic Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenetic Biosciences and Supercom 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 Supercom are associated (or correlated) with Xenetic Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenetic Biosciences has no effect on the direction of Supercom i.e., Supercom and Xenetic Biosciences go up and down completely randomly.

Pair Corralation between Supercom and Xenetic Biosciences

Given the investment horizon of 90 days Supercom is expected to under-perform the Xenetic Biosciences. In addition to that, Supercom is 1.19 times more volatile than Xenetic Biosciences. It trades about -0.11 of its total potential returns per unit of risk. Xenetic Biosciences is currently generating about -0.09 per unit of volatility. If you would invest  265.00  in Xenetic Biosciences on September 9, 2025 and sell it today you would lose (21.00) from holding Xenetic Biosciences or give up 7.92% of portfolio value over 90 days.

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

Supercom  vs.  Xenetic Biosciences

Supercom

Risk-Adjusted Performance

Weakest

Over the last 90 days Supercom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Supercom is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Xenetic Biosciences

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Xenetic Biosciences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Xenetic Biosciences displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Supercom and Xenetic Biosciences

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

The idea behind Supercom and Xenetic Biosciences 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.