Correlation Between Gain Therapeutics and FibroGen
Can any of the company-specific risk be diversified away by investing in both Gain Therapeutics and FibroGen 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 Gain Therapeutics and FibroGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gain Therapeutics and FibroGen, you can compare the effects of market volatilities on Gain Therapeutics and FibroGen 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 Gain Therapeutics with a short position of FibroGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gain Therapeutics and FibroGen.
Diversification Opportunities for Gain Therapeutics and FibroGen
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gain and FibroGen is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gain Therapeutics and FibroGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibroGen and Gain 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 Gain Therapeutics are associated (or correlated) with FibroGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibroGen has no effect on the direction of Gain Therapeutics i.e., Gain Therapeutics and FibroGen go up and down completely randomly.
Pair Corralation between Gain Therapeutics and FibroGen
Given the investment horizon of 90 days Gain Therapeutics is expected to generate 0.58 times more return on investment than FibroGen. However, Gain Therapeutics is 1.72 times less risky than FibroGen. It trades about 0.01 of its potential returns per unit of risk. FibroGen is currently generating about -0.03 per unit of risk. If you would invest 305.00 in Gain Therapeutics on September 3, 2024 and sell it today you would lose (119.00) from holding Gain Therapeutics or give up 39.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gain Therapeutics vs. FibroGen
Performance |
| Timeline |
| Gain Therapeutics |
| FibroGen |
Gain Therapeutics and FibroGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gain Therapeutics and FibroGen
The main advantage of trading using opposite Gain Therapeutics and FibroGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gain Therapeutics position performs unexpectedly, FibroGen 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 FibroGen will offset losses from the drop in FibroGen's long position.| Gain Therapeutics vs. Biovie Inc | Gain Therapeutics vs. In8bio Inc | Gain Therapeutics vs. NewAmsterdam Pharma | Gain Therapeutics vs. Cue Biopharma |
| FibroGen vs. Milestone Pharmaceuticals | FibroGen vs. Seres Therapeutics | FibroGen vs. DiaMedica Therapeutics | FibroGen vs. Lyra 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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