Correlation Between Kura Oncology and United Therapeutics
Can any of the company-specific risk be diversified away by investing in both Kura Oncology and United 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 Kura Oncology and United Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kura Oncology and United Therapeutics, you can compare the effects of market volatilities on Kura Oncology and United 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 Kura Oncology with a short position of United Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Oncology and United Therapeutics.
Diversification Opportunities for Kura Oncology and United Therapeutics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kura and United is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kura Oncology and United Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Therapeutics and Kura Oncology 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 Kura Oncology are associated (or correlated) with United Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Therapeutics has no effect on the direction of Kura Oncology i.e., Kura Oncology and United Therapeutics go up and down completely randomly.
Pair Corralation between Kura Oncology and United Therapeutics
Given the investment horizon of 90 days Kura Oncology is expected to generate 2.43 times less return on investment than United Therapeutics. In addition to that, Kura Oncology is 2.41 times more volatile than United Therapeutics. It trades about 0.01 of its total potential returns per unit of risk. United Therapeutics is currently generating about 0.06 per unit of volatility. If you would invest 25,524 in United Therapeutics on August 27, 2024 and sell it today you would earn a total of 11,765 from holding United Therapeutics or generate 46.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kura Oncology vs. United Therapeutics
Performance |
| Timeline |
| Kura Oncology |
| United Therapeutics |
Kura Oncology and United Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Oncology and United Therapeutics
The main advantage of trading using opposite Kura Oncology and United Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Oncology position performs unexpectedly, United 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 United Therapeutics will offset losses from the drop in United Therapeutics' long position.| Kura Oncology vs. Protagonist Therapeutics | Kura Oncology vs. Merus BV | Kura Oncology vs. Replimune Group | Kura Oncology vs. Kalvista Pharmaceuticals |
| United Therapeutics vs. Incyte | United Therapeutics vs. Alnylam Pharmaceuticals | United Therapeutics vs. Ultragenyx | United Therapeutics vs. Apellis Pharmaceuticals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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