Correlation Between United Therapeutics and ProQR Therapeutics
Can any of the company-specific risk be diversified away by investing in both United Therapeutics and ProQR 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 United Therapeutics and ProQR Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Therapeutics and ProQR Therapeutics BV, you can compare the effects of market volatilities on United Therapeutics and ProQR 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 United Therapeutics with a short position of ProQR Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Therapeutics and ProQR Therapeutics.
Diversification Opportunities for United Therapeutics and ProQR Therapeutics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and ProQR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding United Therapeutics and ProQR Therapeutics BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProQR Therapeutics 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 ProQR Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProQR Therapeutics has no effect on the direction of United Therapeutics i.e., United Therapeutics and ProQR Therapeutics go up and down completely randomly.
Pair Corralation between United Therapeutics and ProQR Therapeutics
Given the investment horizon of 90 days United Therapeutics is expected to generate 1.36 times less return on investment than ProQR Therapeutics. But when comparing it to its historical volatility, United Therapeutics is 1.52 times less risky than ProQR Therapeutics. It trades about 0.12 of its potential returns per unit of risk. ProQR Therapeutics BV is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 331.00 in ProQR Therapeutics BV on August 28, 2024 and sell it today you would earn a total of 23.00 from holding ProQR Therapeutics BV or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Therapeutics vs. ProQR Therapeutics BV
Performance |
| Timeline |
| United Therapeutics |
| ProQR Therapeutics |
United Therapeutics and ProQR Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Therapeutics and ProQR Therapeutics
The main advantage of trading using opposite United Therapeutics and ProQR Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Therapeutics position performs unexpectedly, ProQR 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 ProQR Therapeutics will offset losses from the drop in ProQR Therapeutics' long position.| United Therapeutics vs. Incyte | United Therapeutics vs. Alnylam Pharmaceuticals | United Therapeutics vs. Ultragenyx | United Therapeutics vs. Apellis Pharmaceuticals |
| ProQR Therapeutics vs. Eliem Therapeutics | ProQR Therapeutics vs. HCW Biologics | ProQR Therapeutics vs. Scpharmaceuticals | ProQR Therapeutics vs. Milestone 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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