Correlation Between United Therapeutics and Geron
Can any of the company-specific risk be diversified away by investing in both United Therapeutics and Geron 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 United Therapeutics and Geron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Therapeutics and Geron, you can compare the effects of market volatilities on United Therapeutics and Geron 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 United Therapeutics with a short position of Geron. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Therapeutics and Geron.
Diversification Opportunities for United Therapeutics and Geron
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Geron is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding United Therapeutics and Geron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geron and United Therapeutics 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 United Therapeutics are associated (or correlated) with Geron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geron has no effect on the direction of United Therapeutics i.e., United Therapeutics and Geron go up and down completely randomly.
Pair Corralation between United Therapeutics and Geron
Given the investment horizon of 90 days United Therapeutics is expected to generate 1.63 times less return on investment than Geron. But when comparing it to its historical volatility, United Therapeutics is 3.85 times less risky than Geron. It trades about 0.11 of its potential returns per unit of risk. Geron is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 197.00 in Geron on November 9, 2024 and sell it today you would earn a total of 96.00 from holding Geron or generate 48.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Therapeutics vs. Geron
Performance |
| Timeline |
| United Therapeutics |
| Geron |
United Therapeutics and Geron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Therapeutics and Geron
The main advantage of trading using opposite United Therapeutics and Geron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Therapeutics position performs unexpectedly, Geron 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 Geron will offset losses from the drop in Geron's long position.| United Therapeutics vs. Incyte | United Therapeutics vs. Alnylam Pharmaceuticals | United Therapeutics vs. Ultragenyx | United Therapeutics vs. Apellis Pharmaceuticals |
| Geron vs. Viking Therapeutics | Geron vs. TG Therapeutics | Geron vs. X4 Pharmaceuticals | Geron vs. PDS Biotechnology Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stocks Directory Find actively traded stocks across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |