Correlation Between CTi Biopharma and TG Therapeutics

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

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

Diversification Opportunities for CTi Biopharma and TG Therapeutics

0.79

Correlation Coefficient

CTi Biopharma  TG Therapeutics

Poor diversification

The 3 months correlation between CTi and TGTX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CTi Biopharma Corp and TG Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TG Therapeutics and CTi Biopharma 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 CTi Biopharma Corp 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 CTi Biopharma i.e., CTi Biopharma and TG Therapeutics go up and down completely randomly.

Pair Corralation between CTi Biopharma and TG Therapeutics

If you would invest  3,074  in TG Therapeutics on September 12, 2024 and sell it today you would earn a total of  93.00  from holding TG Therapeutics or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

CTi Biopharma Corp  vs.  TG Therapeutics

CTi Biopharma Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTi Biopharma Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, CTi Biopharma is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

TG Therapeutics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TG Therapeutics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, TG Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CTi Biopharma and TG Therapeutics

The main advantage of trading using opposite CTi Biopharma and TG Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTi Biopharma 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.

The idea behind CTi Biopharma Corp and TG Therapeutics 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.