Correlation Between FibroGen and SPDR Index

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

By analyzing existing cross correlation between FibroGen and SPDR Index Shares, you can compare the effects of market volatilities on FibroGen and SPDR Index 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 SPDR Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibroGen and SPDR Index.

Diversification Opportunities for FibroGen and SPDR Index

-0.67

Correlation Coefficient

FibroGen  SPDR Index

Excellent diversification

The 3 months correlation between FibroGen and SPDR is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding FibroGen and SPDR Index Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Index Shares 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 SPDR Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Index Shares has no effect on the direction of FibroGen i.e., FibroGen and SPDR Index go up and down completely randomly.

Pair Corralation between FibroGen and SPDR Index

Assuming the 90 days trading horizon FibroGen is expected to under-perform the SPDR Index. In addition to that, FibroGen is 6.03 times more volatile than SPDR Index Shares. It trades about -0.07 of its total potential returns per unit of risk. SPDR Index Shares is currently generating about 0.15 per unit of volatility. If you would invest  99,900  in SPDR Index Shares on December 30, 2024 and sell it today you would earn a total of  12,405  from holding SPDR Index Shares or generate 12.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.65%
Values	Daily Returns

FibroGen  vs.  SPDR Index Shares

FibroGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days FibroGen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SPDR Index Shares

Risk-Adjusted Performance

Good

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

Pair Trading with FibroGen and SPDR Index

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

The idea behind FibroGen and SPDR Index Shares 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..