Correlation Between FibroGen and Biogen
Can any of the company-specific risk be diversified away by investing in both FibroGen and Biogen 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 FibroGen and Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibroGen and Biogen Inc, you can compare the effects of market volatilities on FibroGen and Biogen 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 FibroGen with a short position of Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibroGen and Biogen.
Diversification Opportunities for FibroGen and Biogen
Excellent diversification
The 3 months correlation between FibroGen and Biogen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding FibroGen and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc and FibroGen 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 FibroGen are associated (or correlated) with Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of FibroGen i.e., FibroGen and Biogen go up and down completely randomly.
Pair Corralation between FibroGen and Biogen
Assuming the 90 days trading horizon FibroGen is expected to generate 3.57 times more return on investment than Biogen. However, FibroGen is 3.57 times more volatile than Biogen Inc. It trades about 0.29 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.23 per unit of risk. If you would invest 1,025 in FibroGen on November 27, 2024 and sell it today you would earn a total of 476.00 from holding FibroGen or generate 46.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FibroGen vs. Biogen Inc
Performance |
| Timeline |
| FibroGen |
| Biogen Inc |
FibroGen and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibroGen and Biogen
The main advantage of trading using opposite FibroGen and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibroGen position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| FibroGen vs. FIBRA Storage | FibroGen vs. New Oriental Education | FibroGen vs. Delta Air Lines | FibroGen vs. First Republic Bank |
| Biogen vs. Burlington Stores | Biogen vs. Hoteles City Express | Biogen vs. Ross Stores | Biogen vs. Southern Copper |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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