Correlation Between Phathom Pharmaceuticals and Crinetics Pharmaceuticals

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

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

Diversification Opportunities for Phathom Pharmaceuticals and Crinetics Pharmaceuticals

-0.24

Correlation Coefficient

Phathom Pharmaceuticals  Crinetics Pharmaceuticals

Very good diversification

The 3 months correlation between Phathom and Crinetics is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Phathom Pharmaceuticals and Crinetics Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crinetics Pharmaceuticals and Phathom Pharmaceuticals 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 Phathom Pharmaceuticals 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 Phathom Pharmaceuticals i.e., Phathom Pharmaceuticals and Crinetics Pharmaceuticals go up and down completely randomly.

Pair Corralation between Phathom Pharmaceuticals and Crinetics Pharmaceuticals

Given the investment horizon of 90 days Phathom Pharmaceuticals is expected to generate 4.63 times more return on investment than Crinetics Pharmaceuticals. However, Phathom Pharmaceuticals is 4.63 times more volatile than Crinetics Pharmaceuticals. It trades about 0.19 of its potential returns per unit of risk. Crinetics Pharmaceuticals is currently generating about -0.01 per unit of risk. If you would invest  348.00  in Phathom Pharmaceuticals on May 15, 2025 and sell it today you would earn a total of  700.00  from holding Phathom Pharmaceuticals or generate 201.15% return on investment over 90 days.

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

Phathom Pharmaceuticals  vs.  Crinetics Pharmaceuticals

Phathom Pharmaceuticals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Phathom Pharmaceuticals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Phathom Pharmaceuticals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Crinetics Pharmaceuticals

Risk-Adjusted Performance

Weakest

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

Pair Trading with Phathom Pharmaceuticals and Crinetics Pharmaceuticals

The main advantage of trading using opposite Phathom Pharmaceuticals and Crinetics Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phathom Pharmaceuticals 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 Phathom Pharmaceuticals 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.