Correlation Between Foghorn Therapeutics and Fennec Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Foghorn Therapeutics and Fennec Pharmaceuticals 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 Fennec Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foghorn Therapeutics and Fennec Pharmaceuticals, you can compare the effects of market volatilities on Foghorn Therapeutics and Fennec Pharmaceuticals 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 Fennec Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foghorn Therapeutics and Fennec Pharmaceuticals.
Diversification Opportunities for Foghorn Therapeutics and Fennec Pharmaceuticals
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Foghorn and Fennec is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Foghorn Therapeutics and Fennec Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fennec Pharmaceuticals 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 Fennec Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fennec Pharmaceuticals has no effect on the direction of Foghorn Therapeutics i.e., Foghorn Therapeutics and Fennec Pharmaceuticals go up and down completely randomly.
Pair Corralation between Foghorn Therapeutics and Fennec Pharmaceuticals
Given the investment horizon of 90 days Foghorn Therapeutics is expected to generate 1.94 times more return on investment than Fennec Pharmaceuticals. However, Foghorn Therapeutics is 1.94 times more volatile than Fennec Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Fennec Pharmaceuticals is currently generating about -0.01 per unit of risk. If you would invest 623.00 in Foghorn Therapeutics on August 30, 2024 and sell it today you would earn a total of 156.00 from holding Foghorn Therapeutics or generate 25.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foghorn Therapeutics vs. Fennec Pharmaceuticals
Performance |
| Timeline |
| Foghorn Therapeutics |
| Fennec Pharmaceuticals |
Foghorn Therapeutics and Fennec Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foghorn Therapeutics and Fennec Pharmaceuticals
The main advantage of trading using opposite Foghorn Therapeutics and Fennec Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foghorn Therapeutics position performs unexpectedly, Fennec Pharmaceuticals 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 Fennec Pharmaceuticals will offset losses from the drop in Fennec Pharmaceuticals' long position.| Foghorn Therapeutics vs. Ikena Oncology | Foghorn Therapeutics vs. Eliem Therapeutics | Foghorn Therapeutics vs. HCW Biologics | Foghorn Therapeutics vs. RenovoRx |
| Fennec Pharmaceuticals vs. Molecular Partners AG | Fennec Pharmaceuticals vs. MediciNova | Fennec Pharmaceuticals vs. Anebulo Pharmaceuticals | Fennec Pharmaceuticals vs. Champions Oncology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |