Correlation Between IGM Biosciences and Tenaya Therapeutics
Can any of the company-specific risk be diversified away by investing in both IGM Biosciences and Tenaya 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 IGM Biosciences and Tenaya Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Biosciences and Tenaya Therapeutics, you can compare the effects of market volatilities on IGM Biosciences and Tenaya 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 IGM Biosciences with a short position of Tenaya Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Biosciences and Tenaya Therapeutics.
Diversification Opportunities for IGM Biosciences and Tenaya Therapeutics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IGM and Tenaya is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding IGM Biosciences and Tenaya Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaya Therapeutics 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 Tenaya Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaya Therapeutics has no effect on the direction of IGM Biosciences i.e., IGM Biosciences and Tenaya Therapeutics go up and down completely randomly.
Pair Corralation between IGM Biosciences and Tenaya Therapeutics
Given the investment horizon of 90 days IGM Biosciences is expected to generate 4.07 times less return on investment than Tenaya Therapeutics. In addition to that, IGM Biosciences is 1.06 times more volatile than Tenaya Therapeutics. It trades about 0.01 of its total potential returns per unit of risk. Tenaya Therapeutics is currently generating about 0.04 per unit of volatility. If you would invest 226.00 in Tenaya Therapeutics on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Tenaya Therapeutics or generate 30.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGM Biosciences vs. Tenaya Therapeutics
Performance |
| Timeline |
| IGM Biosciences |
| Tenaya Therapeutics |
IGM Biosciences and Tenaya Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGM Biosciences and Tenaya Therapeutics
The main advantage of trading using opposite IGM Biosciences and Tenaya Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Biosciences position performs unexpectedly, Tenaya 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 Tenaya Therapeutics will offset losses from the drop in Tenaya Therapeutics' long position.| IGM Biosciences vs. Avidity Biosciences | IGM Biosciences vs. Cullinan Oncology LLC | IGM Biosciences vs. Mineralys Therapeutics, Common | IGM Biosciences vs. Monte Rosa Therapeutics |
| Tenaya Therapeutics vs. Bicycle Therapeutics | Tenaya Therapeutics vs. IGM Biosciences | Tenaya Therapeutics vs. Monte Rosa Therapeutics | Tenaya 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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