Correlation Between Amicus Therapeutics and Fulcrum Therapeutics
Can any of the company-specific risk be diversified away by investing in both Amicus Therapeutics and Fulcrum Therapeutics 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 Amicus Therapeutics and Fulcrum Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amicus Therapeutics and Fulcrum Therapeutics, you can compare the effects of market volatilities on Amicus Therapeutics and Fulcrum Therapeutics 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 Amicus Therapeutics with a short position of Fulcrum Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amicus Therapeutics and Fulcrum Therapeutics.
Diversification Opportunities for Amicus Therapeutics and Fulcrum Therapeutics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amicus and Fulcrum is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Amicus Therapeutics and Fulcrum Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Therapeutics and Amicus 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 Amicus Therapeutics are associated (or correlated) with Fulcrum Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Therapeutics has no effect on the direction of Amicus Therapeutics i.e., Amicus Therapeutics and Fulcrum Therapeutics go up and down completely randomly.
Pair Corralation between Amicus Therapeutics and Fulcrum Therapeutics
Given the investment horizon of 90 days Amicus Therapeutics is expected to under-perform the Fulcrum Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Amicus Therapeutics is 2.34 times less risky than Fulcrum Therapeutics. The stock trades about -0.01 of its potential returns per unit of risk. The Fulcrum Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 392.00 in Fulcrum Therapeutics on September 12, 2024 and sell it today you would earn a total of 38.50 from holding Fulcrum Therapeutics or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amicus Therapeutics vs. Fulcrum Therapeutics
Performance |
| Timeline |
| Amicus Therapeutics |
| Fulcrum Therapeutics |
Amicus Therapeutics and Fulcrum Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amicus Therapeutics and Fulcrum Therapeutics
The main advantage of trading using opposite Amicus Therapeutics and Fulcrum Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amicus Therapeutics position performs unexpectedly, Fulcrum Therapeutics 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 Fulcrum Therapeutics will offset losses from the drop in Fulcrum Therapeutics' long position.| Amicus Therapeutics vs. Incyte | Amicus Therapeutics vs. Denali Therapeutics | Amicus Therapeutics vs. argenx NV ADR | Amicus Therapeutics vs. Harmony Biosciences Holdings |
| Fulcrum Therapeutics vs. RAPT Therapeutics | Fulcrum Therapeutics vs. Mirum Pharmaceuticals | Fulcrum Therapeutics vs. BeyondSpring | Fulcrum Therapeutics vs. Stoke 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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