Correlation Between Foghorn Therapeutics and AN2 Therapeutics
Can any of the company-specific risk be diversified away by investing in both Foghorn Therapeutics and AN2 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 Foghorn Therapeutics and AN2 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foghorn Therapeutics and AN2 Therapeutics, you can compare the effects of market volatilities on Foghorn Therapeutics and AN2 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 Foghorn Therapeutics with a short position of AN2 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foghorn Therapeutics and AN2 Therapeutics.
Diversification Opportunities for Foghorn Therapeutics and AN2 Therapeutics
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Foghorn and AN2 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Foghorn Therapeutics and AN2 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AN2 Therapeutics and Foghorn Therapeutics 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 Foghorn Therapeutics are associated (or correlated) with AN2 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AN2 Therapeutics has no effect on the direction of Foghorn Therapeutics i.e., Foghorn Therapeutics and AN2 Therapeutics go up and down completely randomly.
Pair Corralation between Foghorn Therapeutics and AN2 Therapeutics
Given the investment horizon of 90 days Foghorn Therapeutics is expected to under-perform the AN2 Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Foghorn Therapeutics is 1.39 times less risky than AN2 Therapeutics. The stock trades about -0.06 of its potential returns per unit of risk. The AN2 Therapeutics is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 110.00 in AN2 Therapeutics on August 29, 2024 and sell it today you would earn a total of 29.00 from holding AN2 Therapeutics or generate 26.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foghorn Therapeutics vs. AN2 Therapeutics
Performance |
| Timeline |
| Foghorn Therapeutics |
| AN2 Therapeutics |
Foghorn Therapeutics and AN2 Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foghorn Therapeutics and AN2 Therapeutics
The main advantage of trading using opposite Foghorn Therapeutics and AN2 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foghorn Therapeutics position performs unexpectedly, AN2 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 AN2 Therapeutics will offset losses from the drop in AN2 Therapeutics' long position.| Foghorn Therapeutics vs. C4 Therapeutics | Foghorn Therapeutics vs. Prelude Therapeutics | Foghorn Therapeutics vs. Rezolute | Foghorn Therapeutics vs. Shattuck Labs |
| AN2 Therapeutics vs. Eliem Therapeutics | AN2 Therapeutics vs. Scpharmaceuticals | AN2 Therapeutics vs. Milestone Pharmaceuticals | AN2 Therapeutics vs. Seres 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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