Correlation Between Foghorn Therapeutics and Immunovant
Can any of the company-specific risk be diversified away by investing in both Foghorn Therapeutics and Immunovant 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 Immunovant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foghorn Therapeutics and Immunovant, you can compare the effects of market volatilities on Foghorn Therapeutics and Immunovant 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 Immunovant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foghorn Therapeutics and Immunovant.
Diversification Opportunities for Foghorn Therapeutics and Immunovant
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Foghorn and Immunovant is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Foghorn Therapeutics and Immunovant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunovant 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 Immunovant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunovant has no effect on the direction of Foghorn Therapeutics i.e., Foghorn Therapeutics and Immunovant go up and down completely randomly.
Pair Corralation between Foghorn Therapeutics and Immunovant
Given the investment horizon of 90 days Foghorn Therapeutics is expected to generate 1.43 times more return on investment than Immunovant. However, Foghorn Therapeutics is 1.43 times more volatile than Immunovant. It trades about -0.06 of its potential returns per unit of risk. Immunovant is currently generating about -0.14 per unit of risk. If you would invest 811.00 in Foghorn Therapeutics on August 28, 2024 and sell it today you would lose (59.00) from holding Foghorn Therapeutics or give up 7.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foghorn Therapeutics vs. Immunovant
Performance |
| Timeline |
| Foghorn Therapeutics |
| Immunovant |
Foghorn Therapeutics and Immunovant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foghorn Therapeutics and Immunovant
The main advantage of trading using opposite Foghorn Therapeutics and Immunovant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foghorn Therapeutics position performs unexpectedly, Immunovant 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 Immunovant will offset losses from the drop in Immunovant's long position.| Foghorn Therapeutics vs. C4 Therapeutics | Foghorn Therapeutics vs. Prelude Therapeutics | Foghorn Therapeutics vs. Rezolute | Foghorn Therapeutics vs. Shattuck Labs |
| Immunovant vs. Arbutus Biopharma Corp | Immunovant vs. Arcutis Biotherapeutics | Immunovant vs. Legend Biotech Corp | Immunovant vs. Protagonist 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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