Correlation Between NGM Biopharmaceutica and C4 Therapeutics

Can any of the company-specific risk be diversified away by investing in both NGM Biopharmaceutica and C4 Therapeutics 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 NGM Biopharmaceutica and C4 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NGM Biopharmaceuticals and C4 Therapeutics, you can compare the effects of market volatilities on NGM Biopharmaceutica and C4 Therapeutics 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 NGM Biopharmaceutica with a short position of C4 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGM Biopharmaceutica and C4 Therapeutics.

Diversification Opportunities for NGM Biopharmaceutica and C4 Therapeutics

0.0

Correlation Coefficient

NGM Biopharmaceutica  C4 Therapeutics

Pay attention - limited upside

The 3 months correlation between NGM and CCCC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NGM Biopharmaceuticals and C4 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C4 Therapeutics and NGM Biopharmaceutica 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 NGM Biopharmaceuticals are associated (or correlated) with C4 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C4 Therapeutics has no effect on the direction of NGM Biopharmaceutica i.e., NGM Biopharmaceutica and C4 Therapeutics go up and down completely randomly.

Pair Corralation between NGM Biopharmaceutica and C4 Therapeutics

If you would invest (100.00) in NGM Biopharmaceuticals on December 26, 2024 and sell it today you would earn a total of  100.00  from holding NGM Biopharmaceuticals or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NGM Biopharmaceuticals  vs.  C4 Therapeutics

NGM Biopharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days NGM Biopharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, NGM Biopharmaceutica is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

C4 Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days C4 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with NGM Biopharmaceutica and C4 Therapeutics

The main advantage of trading using opposite NGM Biopharmaceutica and C4 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGM Biopharmaceutica position performs unexpectedly, C4 Therapeutics 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 C4 Therapeutics will offset losses from the drop in C4 Therapeutics' long position.

The idea behind NGM Biopharmaceuticals and C4 Therapeutics 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.