Correlation Between Biomea Fusion and Ventyx Biosciences

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

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

Diversification Opportunities for Biomea Fusion and Ventyx Biosciences

0.25

Correlation Coefficient

Biomea Fusion  Ventyx Biosciences

Modest diversification

The 3 months correlation between Biomea and Ventyx is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Biomea Fusion and Ventyx Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventyx Biosciences and Biomea Fusion 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 Biomea Fusion are associated (or correlated) with Ventyx Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventyx Biosciences has no effect on the direction of Biomea Fusion i.e., Biomea Fusion and Ventyx Biosciences go up and down completely randomly.

Pair Corralation between Biomea Fusion and Ventyx Biosciences

Given the investment horizon of 90 days Biomea Fusion is expected to generate 9.14 times less return on investment than Ventyx Biosciences. In addition to that, Biomea Fusion is 1.52 times more volatile than Ventyx Biosciences. It trades about 0.01 of its total potential returns per unit of risk. Ventyx Biosciences is currently generating about 0.18 per unit of volatility. If you would invest  138.00  in Ventyx Biosciences on May 5, 2025 and sell it today you would earn a total of  125.00  from holding Ventyx Biosciences or generate 90.58% return on investment over 90 days.

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

Biomea Fusion  vs.  Ventyx Biosciences

Biomea Fusion

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Biomea Fusion are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Biomea Fusion may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Ventyx Biosciences

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ventyx Biosciences are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Ventyx Biosciences showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biomea Fusion and Ventyx Biosciences

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

The idea behind Biomea Fusion and Ventyx Biosciences 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 Transaction History module to view history of all your transactions and understand their impact on performance.