Correlation Between Allient and TuHURA Biosciences

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

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

Diversification Opportunities for Allient and TuHURA Biosciences

-0.32

Correlation Coefficient

Allient  TuHURA Biosciences

Very good diversification

The 3 months correlation between Allient and TuHURA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Allient and TuHURA Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuHURA Biosciences and Allient 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 Allient are associated (or correlated) with TuHURA Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TuHURA Biosciences has no effect on the direction of Allient i.e., Allient and TuHURA Biosciences go up and down completely randomly.

Pair Corralation between Allient and TuHURA Biosciences

Given the investment horizon of 90 days Allient is expected to generate 0.32 times more return on investment than TuHURA Biosciences. However, Allient is 3.17 times less risky than TuHURA Biosciences. It trades about -0.16 of its potential returns per unit of risk. TuHURA Biosciences is currently generating about -0.26 per unit of risk. If you would invest  2,640  in Allient on October 5, 2024 and sell it today you would lose (191.00) from holding Allient or give up 7.23% of portfolio value over 90 days.

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

Allient  vs.  TuHURA Biosciences

Allient

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

TuHURA Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TuHURA Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Allient and TuHURA Biosciences

The main advantage of trading using opposite Allient and TuHURA Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, TuHURA Biosciences 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 TuHURA Biosciences will offset losses from the drop in TuHURA Biosciences' long position.

The idea behind Allient and TuHURA Biosciences 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.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.