Correlation Between 4D Molecular and Curis
Can any of the company-specific risk be diversified away by investing in both 4D Molecular and Curis 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 Curis 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 Curis Inc, you can compare the effects of market volatilities on 4D Molecular and Curis 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 Curis. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4D Molecular and Curis.
Diversification Opportunities for 4D Molecular and Curis
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FDMT and Curis is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding 4D Molecular Therapeutics and Curis Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curis Inc 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 Curis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curis Inc has no effect on the direction of 4D Molecular i.e., 4D Molecular and Curis go up and down completely randomly.
Pair Corralation between 4D Molecular and Curis
Given the investment horizon of 90 days 4D Molecular Therapeutics is expected to generate 1.02 times more return on investment than Curis. However, 4D Molecular is 1.02 times more volatile than Curis Inc. It trades about -0.02 of its potential returns per unit of risk. Curis Inc is currently generating about -0.02 per unit of risk. If you would invest 1,607 in 4D Molecular Therapeutics on November 27, 2024 and sell it today you would lose (1,155) from holding 4D Molecular Therapeutics or give up 71.87% 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. Curis Inc
Performance |
| Timeline |
| 4D Molecular Therapeutics |
| Curis Inc |
4D Molecular and Curis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4D Molecular and Curis
The main advantage of trading using opposite 4D Molecular and Curis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4D Molecular position performs unexpectedly, Curis 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 Curis will offset losses from the drop in Curis' long position.| 4D Molecular vs. Revolution Medicines | 4D Molecular vs. Black Diamond Therapeutics | 4D Molecular vs. Passage Bio | 4D Molecular vs. Century Therapeutics |
| Curis vs. Artelo Biosciences | Curis vs. X4 Pharmaceuticals | Curis vs. Mereo BioPharma Group | Curis vs. Inozyme Pharma |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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