Correlation Between PepGen and Agios Pharm

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

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

Diversification Opportunities for PepGen and Agios Pharm

0.18

Correlation Coefficient

PepGen  Agios Pharm

Average diversification

The 3 months correlation between PepGen and Agios is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Agios Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agios Pharm and PepGen 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 PepGen are associated (or correlated) with Agios Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agios Pharm has no effect on the direction of PepGen i.e., PepGen and Agios Pharm go up and down completely randomly.

Pair Corralation between PepGen and Agios Pharm

Given the investment horizon of 90 days PepGen is expected to under-perform the Agios Pharm. In addition to that, PepGen is 5.75 times more volatile than Agios Pharm. It trades about -0.04 of its total potential returns per unit of risk. Agios Pharm is currently generating about -0.04 per unit of volatility. If you would invest  3,303  in Agios Pharm on December 28, 2024 and sell it today you would lose (275.00) from holding Agios Pharm or give up 8.33% of portfolio value over 90 days.

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

PepGen  vs.  Agios Pharm

PepGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days PepGen 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Agios Pharm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agios Pharm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with PepGen and Agios Pharm

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

The idea behind PepGen and Agios Pharm 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.