Correlation Between Dyne Therapeutics and IGM Biosciences

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

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

Diversification Opportunities for Dyne Therapeutics and IGM Biosciences

-0.16

Correlation Coefficient

Dyne Therapeutics  IGM Biosciences

Good diversification

The 3 months correlation between Dyne and IGM is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dyne Therapeutics and IGM Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGM Biosciences and Dyne 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 Dyne Therapeutics are associated (or correlated) with IGM Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGM Biosciences has no effect on the direction of Dyne Therapeutics i.e., Dyne Therapeutics and IGM Biosciences go up and down completely randomly.

Pair Corralation between Dyne Therapeutics and IGM Biosciences

Considering the 90-day investment horizon Dyne Therapeutics is expected to under-perform the IGM Biosciences. In addition to that, Dyne Therapeutics is 1.56 times more volatile than IGM Biosciences. It trades about -0.01 of its total potential returns per unit of risk. IGM Biosciences is currently generating about 0.02 per unit of volatility. If you would invest  129.00  in IGM Biosciences on May 5, 2025 and sell it today you would earn a total of  2.00  from holding IGM Biosciences or generate 1.55% return on investment over 90 days.

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

Dyne Therapeutics  vs.  IGM Biosciences

Dyne Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dyne Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dyne Therapeutics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

IGM Biosciences

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IGM Biosciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, IGM Biosciences is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dyne Therapeutics and IGM Biosciences

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

The idea behind Dyne Therapeutics and IGM 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..