Correlation Between IGM Biosciences and Gossamer Bio
Can any of the company-specific risk be diversified away by investing in both IGM Biosciences and Gossamer Bio 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 IGM Biosciences and Gossamer Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Biosciences and Gossamer Bio, you can compare the effects of market volatilities on IGM Biosciences and Gossamer Bio 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 IGM Biosciences with a short position of Gossamer Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Biosciences and Gossamer Bio.
Diversification Opportunities for IGM Biosciences and Gossamer Bio
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IGM and Gossamer is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding IGM Biosciences and Gossamer Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gossamer Bio and IGM Biosciences 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 IGM Biosciences are associated (or correlated) with Gossamer Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gossamer Bio has no effect on the direction of IGM Biosciences i.e., IGM Biosciences and Gossamer Bio go up and down completely randomly.
Pair Corralation between IGM Biosciences and Gossamer Bio
Given the investment horizon of 90 days IGM Biosciences is expected to under-perform the Gossamer Bio. In addition to that, IGM Biosciences is 1.82 times more volatile than Gossamer Bio. It trades about -0.59 of its total potential returns per unit of risk. Gossamer Bio is currently generating about -0.47 per unit of volatility. If you would invest 92.00 in Gossamer Bio on August 28, 2024 and sell it today you would lose (22.00) from holding Gossamer Bio or give up 23.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGM Biosciences vs. Gossamer Bio
Performance |
| Timeline |
| IGM Biosciences |
| Gossamer Bio |
IGM Biosciences and Gossamer Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGM Biosciences and Gossamer Bio
The main advantage of trading using opposite IGM Biosciences and Gossamer Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Biosciences position performs unexpectedly, Gossamer Bio 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 Gossamer Bio will offset losses from the drop in Gossamer Bio's long position.| IGM Biosciences vs. Eliem Therapeutics | IGM Biosciences vs. HCW Biologics | IGM Biosciences vs. Scpharmaceuticals | IGM Biosciences vs. Milestone Pharmaceuticals |
| Gossamer Bio vs. Biomea Fusion | Gossamer Bio vs. Stoke Therapeutics | Gossamer Bio vs. Akero Therapeutics | Gossamer Bio vs. Replimune Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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