Correlation Between MacroGenics and SpringWorks Therapeutics

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

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

Diversification Opportunities for MacroGenics and SpringWorks Therapeutics

-0.41

Correlation Coefficient

MacroGenics  SpringWorks Therapeutics

Very good diversification

The 3 months correlation between MacroGenics and SpringWorks is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding MacroGenics and SpringWorks Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpringWorks Therapeutics and MacroGenics 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 MacroGenics are associated (or correlated) with SpringWorks Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpringWorks Therapeutics has no effect on the direction of MacroGenics i.e., MacroGenics and SpringWorks Therapeutics go up and down completely randomly.

Pair Corralation between MacroGenics and SpringWorks Therapeutics

Given the investment horizon of 90 days MacroGenics is expected to under-perform the SpringWorks Therapeutics. In addition to that, MacroGenics is 4.23 times more volatile than SpringWorks Therapeutics. It trades about -0.01 of its total potential returns per unit of risk. SpringWorks Therapeutics is currently generating about 0.2 per unit of volatility. If you would invest  4,121  in SpringWorks Therapeutics on April 23, 2025 and sell it today you would earn a total of  578.00  from holding SpringWorks Therapeutics or generate 14.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	78.69%
Values	Daily Returns

MacroGenics  vs.  SpringWorks Therapeutics

MacroGenics

Risk-Adjusted Performance

Weak

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

SpringWorks Therapeutics

Risk-Adjusted Performance

Solid

Over the last 90 days SpringWorks Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady basic indicators, SpringWorks Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MacroGenics and SpringWorks Therapeutics

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

The idea behind MacroGenics and SpringWorks Therapeutics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.