Correlation Between Foghorn Therapeutics and Inventiva
Can any of the company-specific risk be diversified away by investing in both Foghorn Therapeutics and Inventiva 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 Inventiva into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foghorn Therapeutics and Inventiva Sa, you can compare the effects of market volatilities on Foghorn Therapeutics and Inventiva 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 Inventiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foghorn Therapeutics and Inventiva.
Diversification Opportunities for Foghorn Therapeutics and Inventiva
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Foghorn and Inventiva is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Foghorn Therapeutics and Inventiva Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventiva Sa 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 Inventiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventiva Sa has no effect on the direction of Foghorn Therapeutics i.e., Foghorn Therapeutics and Inventiva go up and down completely randomly.
Pair Corralation between Foghorn Therapeutics and Inventiva
Given the investment horizon of 90 days Foghorn Therapeutics is expected to under-perform the Inventiva. In addition to that, Foghorn Therapeutics is 2.01 times more volatile than Inventiva Sa. It trades about -0.06 of its total potential returns per unit of risk. Inventiva Sa is currently generating about -0.05 per unit of volatility. If you would invest 271.00 in Inventiva Sa on August 29, 2024 and sell it today you would lose (7.00) from holding Inventiva Sa or give up 2.58% 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. Inventiva Sa
Performance |
| Timeline |
| Foghorn Therapeutics |
| Inventiva Sa |
Foghorn Therapeutics and Inventiva Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foghorn Therapeutics and Inventiva
The main advantage of trading using opposite Foghorn Therapeutics and Inventiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foghorn Therapeutics position performs unexpectedly, Inventiva 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 Inventiva will offset losses from the drop in Inventiva's long position.| Foghorn Therapeutics vs. C4 Therapeutics | Foghorn Therapeutics vs. Prelude Therapeutics | Foghorn Therapeutics vs. Rezolute | Foghorn Therapeutics vs. Shattuck Labs |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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