Correlation Between XORTX Therapeutics and First Trust

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

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

Diversification Opportunities for XORTX Therapeutics and First Trust

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Correlation Coefficient

XORTX Therapeutics  First Trust

Pay attention - limited upside

The 3 months correlation between XORTX and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XORTX Therapeutics and First Trust Flexible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Flexible and XORTX 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 XORTX Therapeutics are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Flexible has no effect on the direction of XORTX Therapeutics i.e., XORTX Therapeutics and First Trust go up and down completely randomly.

Pair Corralation between XORTX Therapeutics and First Trust

Given the investment horizon of 90 days XORTX Therapeutics is expected to under-perform the First Trust. In addition to that, XORTX Therapeutics is 15.41 times more volatile than First Trust Flexible. It trades about -0.07 of its total potential returns per unit of risk. First Trust Flexible is currently generating about -0.03 per unit of volatility. If you would invest  1,639  in First Trust Flexible on May 2, 2025 and sell it today you would lose (12.00) from holding First Trust Flexible or give up 0.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

XORTX Therapeutics  vs.  First Trust Flexible

XORTX Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days XORTX Therapeutics 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 basic indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

First Trust Flexible

Risk-Adjusted Performance

Very Weak

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

Pair Trading with XORTX Therapeutics and First Trust

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

The idea behind XORTX Therapeutics and First Trust Flexible 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.