Correlation Between Foghorn Therapeutics and Molecular Partners
Can any of the company-specific risk be diversified away by investing in both Foghorn Therapeutics and Molecular Partners 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 Molecular Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foghorn Therapeutics and Molecular Partners AG, you can compare the effects of market volatilities on Foghorn Therapeutics and Molecular Partners 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 Molecular Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foghorn Therapeutics and Molecular Partners.
Diversification Opportunities for Foghorn Therapeutics and Molecular Partners
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Foghorn and Molecular is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Foghorn Therapeutics and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners 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 Molecular Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molecular Partners has no effect on the direction of Foghorn Therapeutics i.e., Foghorn Therapeutics and Molecular Partners go up and down completely randomly.
Pair Corralation between Foghorn Therapeutics and Molecular Partners
Given the investment horizon of 90 days Foghorn Therapeutics is expected to generate 1.07 times more return on investment than Molecular Partners. However, Foghorn Therapeutics is 1.07 times more volatile than Molecular Partners AG. It trades about 0.07 of its potential returns per unit of risk. Molecular Partners AG is currently generating about 0.05 per unit of risk. If you would invest 349.00 in Foghorn Therapeutics on August 25, 2024 and sell it today you would earn a total of 435.00 from holding Foghorn Therapeutics or generate 124.64% 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. Molecular Partners AG
Performance |
| Timeline |
| Foghorn Therapeutics |
| Molecular Partners |
Foghorn Therapeutics and Molecular Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foghorn Therapeutics and Molecular Partners
The main advantage of trading using opposite Foghorn Therapeutics and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foghorn Therapeutics position performs unexpectedly, Molecular Partners 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 Molecular Partners will offset losses from the drop in Molecular Partners' long position.| Foghorn Therapeutics vs. C4 Therapeutics | Foghorn Therapeutics vs. Prelude Therapeutics | Foghorn Therapeutics vs. Rezolute | Foghorn Therapeutics vs. Shattuck Labs |
| Molecular Partners vs. Eliem Therapeutics | Molecular Partners vs. HCW Biologics | Molecular Partners vs. RenovoRx | Molecular Partners vs. Tempest 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |