Correlation Between IRhythm Technologies and Crinetics Pharmaceuticals

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

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

Diversification Opportunities for IRhythm Technologies and Crinetics Pharmaceuticals

0.03

Correlation Coefficient

IRhythm Technologies  Crinetics Pharmaceuticals

Significant diversification

The 3 months correlation between IRhythm and Crinetics is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding iRhythm Technologies and Crinetics Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crinetics Pharmaceuticals and IRhythm Technologies 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 iRhythm Technologies are associated (or correlated) with Crinetics Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crinetics Pharmaceuticals has no effect on the direction of IRhythm Technologies i.e., IRhythm Technologies and Crinetics Pharmaceuticals go up and down completely randomly.

Pair Corralation between IRhythm Technologies and Crinetics Pharmaceuticals

Given the investment horizon of 90 days iRhythm Technologies is expected to under-perform the Crinetics Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, iRhythm Technologies is 2.23 times less risky than Crinetics Pharmaceuticals. The stock trades about -0.02 of its potential returns per unit of risk. The Crinetics Pharmaceuticals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,377  in Crinetics Pharmaceuticals on September 14, 2025 and sell it today you would earn a total of  1,672  from holding Crinetics Pharmaceuticals or generate 49.51% return on investment over 90 days.

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

iRhythm Technologies  vs.  Crinetics Pharmaceuticals

iRhythm Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days iRhythm Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IRhythm Technologies is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Crinetics Pharmaceuticals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Crinetics Pharmaceuticals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Crinetics Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IRhythm Technologies and Crinetics Pharmaceuticals

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

The idea behind iRhythm Technologies and Crinetics Pharmaceuticals 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.