Correlation Between Durect and TG Therapeutics
Can any of the company-specific risk be diversified away by investing in both Durect and TG 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 Durect and TG Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Durect and TG Therapeutics, you can compare the effects of market volatilities on Durect and TG 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 Durect with a short position of TG Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Durect and TG Therapeutics.
Diversification Opportunities for Durect and TG Therapeutics
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Durect and TGTX is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Durect and TG Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TG Therapeutics and Durect 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 Durect are associated (or correlated) with TG Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TG Therapeutics has no effect on the direction of Durect i.e., Durect and TG Therapeutics go up and down completely randomly.
Pair Corralation between Durect and TG Therapeutics
Given the investment horizon of 90 days Durect is expected to under-perform the TG Therapeutics. In addition to that, Durect is 1.37 times more volatile than TG Therapeutics. It trades about -0.07 of its total potential returns per unit of risk. TG Therapeutics is currently generating about 0.11 per unit of volatility. If you would invest 2,261 in TG Therapeutics on November 2, 2024 and sell it today you would earn a total of 1,075 from holding TG Therapeutics or generate 47.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Durect vs. TG Therapeutics
Performance |
| Timeline |
| Durect |
| TG Therapeutics |
Durect and TG Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Durect and TG Therapeutics
The main advantage of trading using opposite Durect and TG Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Durect position performs unexpectedly, TG 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 TG Therapeutics will offset losses from the drop in TG Therapeutics' long position.| Durect vs. Shuttle Pharmaceuticals | Durect vs. Organogenesis Holdings | Durect vs. Alpha Teknova | Durect vs. Sonoma Pharmaceuticals |
| TG Therapeutics vs. Madrigal Pharmaceuticals | TG Therapeutics vs. Terns Pharmaceuticals | TG Therapeutics vs. Hepion Pharmaceuticals | TG Therapeutics vs. Exelixis |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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