Correlation Between Foghorn Therapeutics and Pyxis Oncology

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

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

Diversification Opportunities for Foghorn Therapeutics and Pyxis Oncology

-0.82

Correlation Coefficient

Foghorn Therapeutics  Pyxis Oncology

Pay attention - limited upside

The 3 months correlation between Foghorn and Pyxis is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Foghorn Therapeutics and Pyxis Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Oncology and Foghorn 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 Foghorn Therapeutics are associated (or correlated) with Pyxis Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyxis Oncology has no effect on the direction of Foghorn Therapeutics i.e., Foghorn Therapeutics and Pyxis Oncology go up and down completely randomly.

Pair Corralation between Foghorn Therapeutics and Pyxis Oncology

Given the investment horizon of 90 days Foghorn Therapeutics is expected to generate 4.42 times less return on investment than Pyxis Oncology. But when comparing it to its historical volatility, Foghorn Therapeutics is 1.1 times less risky than Pyxis Oncology. It trades about 0.06 of its potential returns per unit of risk. Pyxis Oncology is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  323.00  in Pyxis Oncology on August 15, 2025 and sell it today you would earn a total of  114.00  from holding Pyxis Oncology or generate 35.29% return on investment over 90 days.

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

Foghorn Therapeutics  vs.  Pyxis Oncology

Foghorn Therapeutics

Risk-Adjusted Performance

Weakest

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

Pyxis Oncology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pyxis Oncology are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Pyxis Oncology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Foghorn Therapeutics and Pyxis Oncology

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

The idea behind Foghorn Therapeutics and Pyxis Oncology 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.