Correlation Between Cullinan Oncology and Foghorn Therapeutics
Can any of the company-specific risk be diversified away by investing in both Cullinan Oncology and Foghorn 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 Cullinan Oncology and Foghorn Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullinan Oncology LLC and Foghorn Therapeutics, you can compare the effects of market volatilities on Cullinan Oncology and Foghorn 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 Cullinan Oncology with a short position of Foghorn Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullinan Oncology and Foghorn Therapeutics.
Diversification Opportunities for Cullinan Oncology and Foghorn Therapeutics
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cullinan and Foghorn is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cullinan Oncology LLC and Foghorn Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foghorn Therapeutics and Cullinan Oncology 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 Cullinan Oncology LLC are associated (or correlated) with Foghorn Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foghorn Therapeutics has no effect on the direction of Cullinan Oncology i.e., Cullinan Oncology and Foghorn Therapeutics go up and down completely randomly.
Pair Corralation between Cullinan Oncology and Foghorn Therapeutics
Given the investment horizon of 90 days Cullinan Oncology LLC is expected to under-perform the Foghorn Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Cullinan Oncology LLC is 1.0 times less risky than Foghorn Therapeutics. The stock trades about -0.24 of its potential returns per unit of risk. The Foghorn Therapeutics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 764.00 in Foghorn Therapeutics on August 25, 2024 and sell it today you would earn a total of 20.00 from holding Foghorn Therapeutics or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullinan Oncology LLC vs. Foghorn Therapeutics
Performance |
| Timeline |
| Cullinan Oncology LLC |
| Foghorn Therapeutics |
Cullinan Oncology and Foghorn Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullinan Oncology and Foghorn Therapeutics
The main advantage of trading using opposite Cullinan Oncology and Foghorn Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullinan Oncology position performs unexpectedly, Foghorn 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 Foghorn Therapeutics will offset losses from the drop in Foghorn Therapeutics' long position.| Cullinan Oncology vs. Eliem Therapeutics | Cullinan Oncology vs. HCW Biologics | Cullinan Oncology vs. RenovoRx | Cullinan Oncology vs. Scpharmaceuticals |
| Foghorn Therapeutics vs. C4 Therapeutics | Foghorn Therapeutics vs. Prelude Therapeutics | Foghorn Therapeutics vs. Rezolute | Foghorn Therapeutics vs. Shattuck Labs |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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