Correlation Between NYSE Composite and FibroGen
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and FibroGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and FibroGen, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of FibroGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and FibroGen.
Diversification Opportunities for NYSE Composite and FibroGen
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and FibroGen is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and FibroGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibroGen and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and FibroGen go up and down completely randomly.
Pair Corralation between NYSE Composite and FibroGen
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.69 times less return on investment than FibroGen. But when comparing it to its historical volatility, NYSE Composite is 10.96 times less risky than FibroGen. It trades about 0.17 of its potential returns per unit of risk. FibroGen is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 33.00 in FibroGen on September 3, 2024 and sell it today you would earn a total of 9.00 from holding FibroGen or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. FibroGen
Performance |
| Timeline |
NYSE Composite and FibroGen Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
FibroGen
Pair trading matchups for FibroGen
Pair Trading with NYSE Composite and FibroGen
The main advantage of trading using opposite NYSE Composite and FibroGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| FibroGen vs. DiaMedica Therapeutics | FibroGen vs. Lyra Therapeutics | FibroGen vs. Centessa Pharmaceuticals PLC |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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