Correlation Between Ionis Pharmaceuticals and FibroGen

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

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

Diversification Opportunities for Ionis Pharmaceuticals and FibroGen

-0.29

Correlation Coefficient

Ionis Pharmaceuticals  FibroGen

Very good diversification

The 3 months correlation between Ionis and FibroGen is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ionis Pharmaceuticals and FibroGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibroGen and Ionis Pharmaceuticals 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 Ionis Pharmaceuticals 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 Ionis Pharmaceuticals i.e., Ionis Pharmaceuticals and FibroGen go up and down completely randomly.

Pair Corralation between Ionis Pharmaceuticals and FibroGen

Given the investment horizon of 90 days Ionis Pharmaceuticals is expected to generate 0.28 times more return on investment than FibroGen. However, Ionis Pharmaceuticals is 3.52 times less risky than FibroGen. It trades about -0.05 of its potential returns per unit of risk. FibroGen is currently generating about -0.02 per unit of risk. If you would invest  3,608  in Ionis Pharmaceuticals on December 21, 2024 and sell it today you would lose (335.00) from holding Ionis Pharmaceuticals or give up 9.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ionis Pharmaceuticals  vs.  FibroGen

Ionis Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ionis Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ionis Pharmaceuticals and FibroGen

The main advantage of trading using opposite Ionis Pharmaceuticals and FibroGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ionis Pharmaceuticals 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.

The idea behind Ionis Pharmaceuticals and FibroGen 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.