Correlation Between Cogent Biosciences and Larimar Therapeutics
Can any of the company-specific risk be diversified away by investing in both Cogent Biosciences and Larimar 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 Cogent Biosciences and Larimar Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogent Biosciences and Larimar Therapeutics, you can compare the effects of market volatilities on Cogent Biosciences and Larimar 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 Cogent Biosciences with a short position of Larimar Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Biosciences and Larimar Therapeutics.
Diversification Opportunities for Cogent Biosciences and Larimar Therapeutics
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cogent and Larimar is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Biosciences and Larimar Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Larimar Therapeutics and Cogent 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 Cogent Biosciences are associated (or correlated) with Larimar Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Larimar Therapeutics has no effect on the direction of Cogent Biosciences i.e., Cogent Biosciences and Larimar Therapeutics go up and down completely randomly.
Pair Corralation between Cogent Biosciences and Larimar Therapeutics
Given the investment horizon of 90 days Cogent Biosciences is expected to under-perform the Larimar Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Cogent Biosciences is 1.4 times less risky than Larimar Therapeutics. The stock trades about -0.24 of its potential returns per unit of risk. The Larimar Therapeutics is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 801.00 in Larimar Therapeutics on August 28, 2024 and sell it today you would lose (168.00) from holding Larimar Therapeutics or give up 20.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Biosciences vs. Larimar Therapeutics
Performance |
| Timeline |
| Cogent Biosciences |
| Larimar Therapeutics |
Cogent Biosciences and Larimar Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Biosciences and Larimar Therapeutics
The main advantage of trading using opposite Cogent Biosciences and Larimar Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Biosciences position performs unexpectedly, Larimar 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 Larimar Therapeutics will offset losses from the drop in Larimar Therapeutics' long position.| Cogent Biosciences vs. Larimar Therapeutics | Cogent Biosciences vs. Kura Oncology | Cogent Biosciences vs. Kiniksa Pharmaceuticals | Cogent Biosciences vs. Ideaya Biosciences |
| Larimar Therapeutics vs. Vaxcyte | Larimar Therapeutics vs. Syndax Pharmaceuticals | Larimar Therapeutics vs. Merus BV | Larimar Therapeutics vs. Sutro Biopharma |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |