Correlation Between 4D Molecular and Compugen
Can any of the company-specific risk be diversified away by investing in both 4D Molecular and Compugen 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 4D Molecular and Compugen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4D Molecular Therapeutics and Compugen, you can compare the effects of market volatilities on 4D Molecular and Compugen 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 4D Molecular with a short position of Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4D Molecular and Compugen.
Diversification Opportunities for 4D Molecular and Compugen
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FDMT and Compugen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding 4D Molecular Therapeutics and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen and 4D Molecular 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 4D Molecular Therapeutics are associated (or correlated) with Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of 4D Molecular i.e., 4D Molecular and Compugen go up and down completely randomly.
Pair Corralation between 4D Molecular and Compugen
Given the investment horizon of 90 days 4D Molecular Therapeutics is expected to under-perform the Compugen. In addition to that, 4D Molecular is 1.49 times more volatile than Compugen. It trades about -0.13 of its total potential returns per unit of risk. Compugen is currently generating about -0.05 per unit of volatility. If you would invest 219.00 in Compugen on September 1, 2024 and sell it today you would lose (58.00) from holding Compugen or give up 26.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
4D Molecular Therapeutics vs. Compugen
Performance |
| Timeline |
| 4D Molecular Therapeutics |
| Compugen |
4D Molecular and Compugen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4D Molecular and Compugen
The main advantage of trading using opposite 4D Molecular and Compugen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4D Molecular position performs unexpectedly, Compugen 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 Compugen will offset losses from the drop in Compugen's long position.| 4D Molecular vs. Tff Pharmaceuticals | 4D Molecular vs. Eliem Therapeutics | 4D Molecular vs. Inhibrx | 4D Molecular vs. Enliven Therapeutics |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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