Correlation Between Phathom Pharmaceuticals and Cullinan Oncology

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Can any of the company-specific risk be diversified away by investing in both Phathom Pharmaceuticals and Cullinan Oncology 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 Phathom Pharmaceuticals and Cullinan Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phathom Pharmaceuticals and Cullinan Oncology LLC, you can compare the effects of market volatilities on Phathom Pharmaceuticals and Cullinan Oncology 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 Phathom Pharmaceuticals with a short position of Cullinan Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phathom Pharmaceuticals and Cullinan Oncology.

Diversification Opportunities for Phathom Pharmaceuticals and Cullinan Oncology

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Phathom and Cullinan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Phathom Pharmaceuticals and Cullinan Oncology LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullinan Oncology LLC and Phathom 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 Phathom Pharmaceuticals are associated (or correlated) with Cullinan Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullinan Oncology LLC has no effect on the direction of Phathom Pharmaceuticals i.e., Phathom Pharmaceuticals and Cullinan Oncology go up and down completely randomly.

Pair Corralation between Phathom Pharmaceuticals and Cullinan Oncology

Given the investment horizon of 90 days Phathom Pharmaceuticals is expected to under-perform the Cullinan Oncology. In addition to that, Phathom Pharmaceuticals is 1.61 times more volatile than Cullinan Oncology LLC. It trades about -0.15 of its total potential returns per unit of risk. Cullinan Oncology LLC is currently generating about -0.13 per unit of volatility. If you would invest  1,798  in Cullinan Oncology LLC on September 6, 2024 and sell it today you would lose (502.00) from holding Cullinan Oncology LLC or give up 27.92% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.44%
ValuesDaily Returns

Phathom Pharmaceuticals  vs.  Cullinan Oncology LLC

 Performance 
       Timeline  
Phathom Pharmaceuticals 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Phathom Pharmaceuticals 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Cullinan Oncology LLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cullinan Oncology LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Phathom Pharmaceuticals and Cullinan Oncology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Phathom Pharmaceuticals and Cullinan Oncology

The main advantage of trading using opposite Phathom Pharmaceuticals and Cullinan Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phathom Pharmaceuticals position performs unexpectedly, Cullinan Oncology 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 Cullinan Oncology will offset losses from the drop in Cullinan Oncology's long position.
The idea behind Phathom Pharmaceuticals and Cullinan Oncology LLC 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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