Correlation Between XORTX Therapeutics and Power Integrations

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

By analyzing existing cross correlation between XORTX Therapeutics and Power Integrations, you can compare the effects of market volatilities on XORTX Therapeutics and Power Integrations 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 Power Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of XORTX Therapeutics and Power Integrations.

Diversification Opportunities for XORTX Therapeutics and Power Integrations

-0.2

Correlation Coefficient

XORTX Therapeutics  Power Integrations

Good diversification

The 3 months correlation between XORTX and Power is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding XORTX Therapeutics and Power Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Integrations 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 Power Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Integrations has no effect on the direction of XORTX Therapeutics i.e., XORTX Therapeutics and Power Integrations go up and down completely randomly.

Pair Corralation between XORTX Therapeutics and Power Integrations

Given the investment horizon of 90 days XORTX Therapeutics is expected to generate 1.64 times more return on investment than Power Integrations. However, XORTX Therapeutics is 1.64 times more volatile than Power Integrations. It trades about -0.01 of its potential returns per unit of risk. Power Integrations is currently generating about -0.05 per unit of risk. If you would invest  81.00  in XORTX Therapeutics on July 27, 2025 and sell it today you would lose (15.00) from holding XORTX Therapeutics or give up 18.52% of portfolio value over 90 days.

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

XORTX Therapeutics  vs.  Power Integrations

XORTX Therapeutics

Risk-Adjusted Performance

Weakest

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

Power Integrations

Risk-Adjusted Performance

Weakest

Over the last 90 days Power Integrations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in November 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with XORTX Therapeutics and Power Integrations

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

The idea behind XORTX Therapeutics and Power Integrations 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.