Correlation Between XOMA Corp and Climb Bio

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

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

Diversification Opportunities for XOMA Corp and Climb Bio

0.28

Correlation Coefficient

XOMA Corp  Climb Bio

Modest diversification

The 3 months correlation between XOMA and Climb is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding XOMA Corp and Climb Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Climb Bio and XOMA Corp 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 XOMA Corp are associated (or correlated) with Climb Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Climb Bio has no effect on the direction of XOMA Corp i.e., XOMA Corp and Climb Bio go up and down completely randomly.

Pair Corralation between XOMA Corp and Climb Bio

Given the investment horizon of 90 days XOMA Corp is expected to generate 3.29 times less return on investment than Climb Bio. But when comparing it to its historical volatility, XOMA Corp is 1.41 times less risky than Climb Bio. It trades about 0.03 of its potential returns per unit of risk. Climb Bio is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  125.00  in Climb Bio on May 4, 2025 and sell it today you would earn a total of  20.00  from holding Climb Bio or generate 16.0% return on investment over 90 days.

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

XOMA Corp  vs.  Climb Bio

XOMA Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in XOMA Corp are ranked lower than 2 (%) 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.

Climb Bio

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Climb Bio are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Climb Bio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XOMA Corp and Climb Bio

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

The idea behind XOMA Corp and Climb Bio 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 Commodity Directory module to find actively traded commodities issued by global exchanges.