Correlation Between Protagonist Therapeutics and IGM Biosciences
Can any of the company-specific risk be diversified away by investing in both Protagonist Therapeutics and IGM Biosciences 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 Protagonist Therapeutics and IGM Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Protagonist Therapeutics and IGM Biosciences, you can compare the effects of market volatilities on Protagonist Therapeutics and IGM Biosciences 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 Protagonist Therapeutics with a short position of IGM Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protagonist Therapeutics and IGM Biosciences.
Diversification Opportunities for Protagonist Therapeutics and IGM Biosciences
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Protagonist and IGM is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Protagonist Therapeutics and IGM Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGM Biosciences and Protagonist 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 Protagonist Therapeutics are associated (or correlated) with IGM Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGM Biosciences has no effect on the direction of Protagonist Therapeutics i.e., Protagonist Therapeutics and IGM Biosciences go up and down completely randomly.
Pair Corralation between Protagonist Therapeutics and IGM Biosciences
Given the investment horizon of 90 days Protagonist Therapeutics is expected to generate 0.15 times more return on investment than IGM Biosciences. However, Protagonist Therapeutics is 6.75 times less risky than IGM Biosciences. It trades about -0.03 of its potential returns per unit of risk. IGM Biosciences is currently generating about -0.32 per unit of risk. If you would invest 3,845 in Protagonist Therapeutics on November 8, 2024 and sell it today you would lose (70.00) from holding Protagonist Therapeutics or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Protagonist Therapeutics vs. IGM Biosciences
Performance |
| Timeline |
| Protagonist Therapeutics |
| IGM Biosciences |
Protagonist Therapeutics and IGM Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Protagonist Therapeutics and IGM Biosciences
The main advantage of trading using opposite Protagonist Therapeutics and IGM Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protagonist Therapeutics position performs unexpectedly, IGM Biosciences 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 IGM Biosciences will offset losses from the drop in IGM Biosciences' long position.| Protagonist Therapeutics vs. Revolution Medicines | Protagonist Therapeutics vs. Akero Therapeutics | Protagonist Therapeutics vs. Avidity Biosciences | Protagonist Therapeutics vs. Stoke Therapeutics |
| IGM Biosciences vs. Avidity Biosciences | IGM Biosciences vs. Cullinan Oncology LLC | IGM Biosciences vs. Mineralys Therapeutics, Common | IGM Biosciences vs. Monte Rosa 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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