Correlation Between Inozyme Pharma and Biogen
Can any of the company-specific risk be diversified away by investing in both Inozyme Pharma and Biogen 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 Inozyme Pharma and Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inozyme Pharma and Biogen Inc, you can compare the effects of market volatilities on Inozyme Pharma and Biogen 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 Inozyme Pharma with a short position of Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inozyme Pharma and Biogen.
Diversification Opportunities for Inozyme Pharma and Biogen
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inozyme and Biogen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Inozyme Pharma and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc and Inozyme Pharma 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 Inozyme Pharma are associated (or correlated) with Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of Inozyme Pharma i.e., Inozyme Pharma and Biogen go up and down completely randomly.
Pair Corralation between Inozyme Pharma and Biogen
Given the investment horizon of 90 days Inozyme Pharma is expected to under-perform the Biogen. In addition to that, Inozyme Pharma is 2.86 times more volatile than Biogen Inc. It trades about -0.06 of its total potential returns per unit of risk. Biogen Inc is currently generating about -0.12 per unit of volatility. If you would invest 24,619 in Biogen Inc on November 9, 2024 and sell it today you would lose (10,382) from holding Biogen Inc or give up 42.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inozyme Pharma vs. Biogen Inc
Performance |
| Timeline |
| Inozyme Pharma |
| Biogen Inc |
Inozyme Pharma and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inozyme Pharma and Biogen
The main advantage of trading using opposite Inozyme Pharma and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inozyme Pharma position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| Inozyme Pharma vs. Day One Biopharmaceuticals | Inozyme Pharma vs. X4 Pharmaceuticals | Inozyme Pharma vs. Acumen Pharmaceuticals | Inozyme Pharma vs. Mereo BioPharma Group |
| Biogen vs. Bristol Myers Squibb | Biogen vs. AbbVie Inc | Biogen vs. Merck Company | Biogen vs. Gilead Sciences |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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