Correlation Between Tscan Therapeutics and XBiotech

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

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

Diversification Opportunities for Tscan Therapeutics and XBiotech

0.21

Correlation Coefficient

Tscan Therapeutics  XBiotech

Modest diversification

The 3 months correlation between Tscan and XBiotech is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tscan Therapeutics and XBiotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBiotech and Tscan 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 Tscan Therapeutics 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 Tscan Therapeutics i.e., Tscan Therapeutics and XBiotech go up and down completely randomly.

Pair Corralation between Tscan Therapeutics and XBiotech

Given the investment horizon of 90 days Tscan Therapeutics is expected to under-perform the XBiotech. In addition to that, Tscan Therapeutics is 1.41 times more volatile than XBiotech. It trades about -0.35 of its total potential returns per unit of risk. XBiotech is currently generating about -0.07 per unit of volatility. If you would invest  249.00  in XBiotech on August 23, 2025 and sell it today you would lose (33.00) from holding XBiotech or give up 13.25% of portfolio value over 90 days.

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

Tscan Therapeutics  vs.  XBiotech

Tscan Therapeutics

Risk-Adjusted Performance

Weakest

Over the last 90 days Tscan Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in December 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Tscan Therapeutics and XBiotech

The main advantage of trading using opposite Tscan Therapeutics and XBiotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tscan Therapeutics 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 Tscan Therapeutics 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.