Correlation Between Instil Bio and NGM Biopharmaceutica

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

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

Diversification Opportunities for Instil Bio and NGM Biopharmaceutica

0.0

Correlation Coefficient

Instil Bio  NGM Biopharmaceutica

Pay attention - limited upside

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

Pair Corralation between Instil Bio and NGM Biopharmaceutica

If you would invest  2,005  in Instil Bio on December 27, 2024 and sell it today you would lose (206.00) from holding Instil Bio or give up 10.27% of portfolio value over 90 days.

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

Instil Bio  vs.  NGM Biopharmaceuticals

Instil Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Instil Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Instil Bio is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Instil Bio and NGM Biopharmaceutica

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

The idea behind Instil Bio and NGM Biopharmaceuticals 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.