Correlation Between XSpray Pharma and IRLAB Therapeutics

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

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

Diversification Opportunities for XSpray Pharma and IRLAB Therapeutics

-0.9

Correlation Coefficient

XSpray Pharma  IRLAB Therapeutics

Pay attention - limited upside

The 3 months correlation between XSpray and IRLAB is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding XSpray Pharma AB and IRLAB Therapeutics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRLAB Therapeutics and XSpray Pharma 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 XSpray Pharma AB are associated (or correlated) with IRLAB Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRLAB Therapeutics has no effect on the direction of XSpray Pharma i.e., XSpray Pharma and IRLAB Therapeutics go up and down completely randomly.

Pair Corralation between XSpray Pharma and IRLAB Therapeutics

Assuming the 90 days trading horizon XSpray Pharma AB is expected to generate 0.71 times more return on investment than IRLAB Therapeutics. However, XSpray Pharma AB is 1.41 times less risky than IRLAB Therapeutics. It trades about 0.16 of its potential returns per unit of risk. IRLAB Therapeutics AB is currently generating about -0.15 per unit of risk. If you would invest  3,650  in XSpray Pharma AB on April 22, 2025 and sell it today you would earn a total of  1,560  from holding XSpray Pharma AB or generate 42.74% return on investment over 90 days.

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

XSpray Pharma AB  vs.  IRLAB Therapeutics AB

XSpray Pharma AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in XSpray Pharma AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, XSpray Pharma sustained solid returns over the last few months and may actually be approaching a breakup point.

IRLAB Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days IRLAB Therapeutics AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Pair Trading with XSpray Pharma and IRLAB Therapeutics

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

The idea behind XSpray Pharma AB and IRLAB Therapeutics AB 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.