Correlation Between FibroGen and Compaa Minera

Can any of the company-specific risk be diversified away by investing in both FibroGen and Compaa Minera 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 FibroGen and Compaa Minera into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FibroGen and Compaa Minera Autln, you can compare the effects of market volatilities on FibroGen and Compaa Minera 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 FibroGen with a short position of Compaa Minera. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibroGen and Compaa Minera.

Diversification Opportunities for FibroGen and Compaa Minera

-0.69

Correlation Coefficient

FibroGen  Compaa Minera

Excellent diversification

The 3 months correlation between FibroGen and Compaa is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding FibroGen and Compaa Minera Autln in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compaa Minera Autln and FibroGen 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 FibroGen are associated (or correlated) with Compaa Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compaa Minera Autln has no effect on the direction of FibroGen i.e., FibroGen and Compaa Minera go up and down completely randomly.

Pair Corralation between FibroGen and Compaa Minera

Assuming the 90 days trading horizon FibroGen is expected to generate 4.39 times more return on investment than Compaa Minera. However, FibroGen is 4.39 times more volatile than Compaa Minera Autln. It trades about 0.03 of its potential returns per unit of risk. Compaa Minera Autln is currently generating about -0.06 per unit of risk. If you would invest  1,508  in FibroGen on October 5, 2024 and sell it today you would lose (313.00) from holding FibroGen or give up 20.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.62%
Values	Daily Returns

FibroGen  vs.  Compaa Minera Autln

FibroGen

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FibroGen are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, FibroGen showed solid returns over the last few months and may actually be approaching a breakup point.

Compaa Minera Autln

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compaa Minera Autln has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with FibroGen and Compaa Minera

The main advantage of trading using opposite FibroGen and Compaa Minera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibroGen position performs unexpectedly, Compaa Minera 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 Compaa Minera will offset losses from the drop in Compaa Minera's long position.

The idea behind FibroGen and Compaa Minera Autln pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.