Correlation Between Foghorn Therapeutics and Graphite Bio
Can any of the company-specific risk be diversified away by investing in both Foghorn Therapeutics and Graphite Bio 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 Graphite Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foghorn Therapeutics and Graphite Bio, you can compare the effects of market volatilities on Foghorn Therapeutics and Graphite Bio 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 Graphite Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foghorn Therapeutics and Graphite Bio.
Diversification Opportunities for Foghorn Therapeutics and Graphite Bio
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Foghorn and Graphite is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Foghorn Therapeutics and Graphite Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite Bio 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 Graphite Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite Bio has no effect on the direction of Foghorn Therapeutics i.e., Foghorn Therapeutics and Graphite Bio go up and down completely randomly.
Pair Corralation between Foghorn Therapeutics and Graphite Bio
Given the investment horizon of 90 days Foghorn Therapeutics is expected to generate 2.79 times more return on investment than Graphite Bio. However, Foghorn Therapeutics is 2.79 times more volatile than Graphite Bio. It trades about 0.03 of its potential returns per unit of risk. Graphite Bio is currently generating about -0.07 per unit of risk. If you would invest 810.00 in Foghorn Therapeutics on September 1, 2024 and sell it today you would lose (11.00) from holding Foghorn Therapeutics or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 8.33% |
| Values | Daily Returns |
Foghorn Therapeutics vs. Graphite Bio
Performance |
| Timeline |
| Foghorn Therapeutics |
| Graphite Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Foghorn Therapeutics and Graphite Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foghorn Therapeutics and Graphite Bio
The main advantage of trading using opposite Foghorn Therapeutics and Graphite Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foghorn Therapeutics position performs unexpectedly, Graphite Bio 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 Graphite Bio will offset losses from the drop in Graphite Bio's long position.| Foghorn Therapeutics vs. C4 Therapeutics | Foghorn Therapeutics vs. Prelude Therapeutics | Foghorn Therapeutics vs. Rezolute | Foghorn Therapeutics vs. Shattuck Labs |
| Graphite Bio vs. Assembly Biosciences | Graphite Bio vs. Instil Bio | Graphite Bio vs. Nuvation Bio | Graphite Bio vs. Achilles Therapeutics PLC |
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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |