Correlation Between C4 Therapeutics and Assembly Biosciences

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

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

Diversification Opportunities for C4 Therapeutics and Assembly Biosciences

0.77

Correlation Coefficient

C4 Therapeutics  Assembly Biosciences

Poor diversification

The 3 months correlation between CCCC and Assembly is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding C4 Therapeutics and Assembly Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assembly Biosciences and C4 Therapeutics 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 C4 Therapeutics are associated (or correlated) with Assembly Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assembly Biosciences has no effect on the direction of C4 Therapeutics i.e., C4 Therapeutics and Assembly Biosciences go up and down completely randomly.

Pair Corralation between C4 Therapeutics and Assembly Biosciences

Given the investment horizon of 90 days C4 Therapeutics is expected to generate 1.04 times less return on investment than Assembly Biosciences. In addition to that, C4 Therapeutics is 2.13 times more volatile than Assembly Biosciences. It trades about 0.14 of its total potential returns per unit of risk. Assembly Biosciences is currently generating about 0.31 per unit of volatility. If you would invest  1,380  in Assembly Biosciences on May 18, 2025 and sell it today you would earn a total of  1,164  from holding Assembly Biosciences or generate 84.35% return on investment over 90 days.

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

C4 Therapeutics  vs.  Assembly Biosciences

C4 Therapeutics

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in C4 Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, C4 Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Assembly Biosciences

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Assembly Biosciences are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Assembly Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C4 Therapeutics and Assembly Biosciences

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

The idea behind C4 Therapeutics and Assembly 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.