Correlation Between Assembly Biosciences and NGM Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Assembly Biosciences and NGM Biopharmaceutica 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 Assembly Biosciences and NGM Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assembly Biosciences and NGM Biopharmaceuticals, you can compare the effects of market volatilities on Assembly Biosciences and NGM Biopharmaceutica 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 Assembly Biosciences with a short position of NGM Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assembly Biosciences and NGM Biopharmaceutica.
Diversification Opportunities for Assembly Biosciences and NGM Biopharmaceutica
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Assembly and NGM is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Assembly Biosciences and NGM Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGM Biopharmaceuticals and Assembly Biosciences 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 Assembly Biosciences are associated (or correlated) with NGM Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGM Biopharmaceuticals has no effect on the direction of Assembly Biosciences i.e., Assembly Biosciences and NGM Biopharmaceutica go up and down completely randomly.
Pair Corralation between Assembly Biosciences and NGM Biopharmaceutica
If you would invest 1,681 in Assembly Biosciences on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Assembly Biosciences or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Assembly Biosciences vs. NGM Biopharmaceuticals
Performance |
| Timeline |
| Assembly Biosciences |
| NGM Biopharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Assembly Biosciences and NGM Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assembly Biosciences and NGM Biopharmaceutica
The main advantage of trading using opposite Assembly Biosciences and NGM Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assembly Biosciences position performs unexpectedly, NGM Biopharmaceutica 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 NGM Biopharmaceutica will offset losses from the drop in NGM Biopharmaceutica's long position.| Assembly Biosciences vs. Spero Therapeutics | Assembly Biosciences vs. Achilles Therapeutics PLC | Assembly Biosciences vs. Instil Bio | Assembly Biosciences vs. CytomX Therapeutics |
| NGM Biopharmaceutica vs. Instil Bio | NGM Biopharmaceutica vs. Achilles Therapeutics PLC | NGM Biopharmaceutica vs. NextCure | NGM Biopharmaceutica vs. Assembly Biosciences |
Check out your portfolio center.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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