Correlation Between Gossamer Bio and Passage Bio

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

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

Diversification Opportunities for Gossamer Bio and Passage Bio

0.28

Correlation Coefficient

Gossamer Bio  Passage Bio

Modest diversification

The 3 months correlation between Gossamer and Passage is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gossamer Bio and Passage Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passage Bio and Gossamer 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 Gossamer Bio are associated (or correlated) with Passage Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passage Bio has no effect on the direction of Gossamer Bio i.e., Gossamer Bio and Passage Bio go up and down completely randomly.

Pair Corralation between Gossamer Bio and Passage Bio

Given the investment horizon of 90 days Gossamer Bio is expected to generate 1.22 times more return on investment than Passage Bio. However, Gossamer Bio is 1.22 times more volatile than Passage Bio. It trades about 0.07 of its potential returns per unit of risk. Passage Bio is currently generating about 0.07 per unit of risk. If you would invest  208.00  in Gossamer Bio on July 30, 2025 and sell it today you would earn a total of  31.00  from holding Gossamer Bio or generate 14.9% return on investment over 90 days.

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

Gossamer Bio  vs.  Passage Bio

Gossamer Bio

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Gossamer Bio are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Gossamer Bio unveiled solid returns over the last few months and may actually be approaching a breakup point.

Passage Bio

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Passage Bio are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Passage Bio reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gossamer Bio and Passage Bio

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

The idea behind Gossamer Bio and Passage Bio 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.