Correlation Between Estrella Immunopharma and UroGen Pharma

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

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

Diversification Opportunities for Estrella Immunopharma and UroGen Pharma

-0.06

Correlation Coefficient

Estrella Immunopharma  UroGen Pharma

Good diversification

The 3 months correlation between Estrella and UroGen is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Estrella Immunopharma and UroGen Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UroGen Pharma and Estrella Immunopharma 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 Estrella Immunopharma are associated (or correlated) with UroGen Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UroGen Pharma has no effect on the direction of Estrella Immunopharma i.e., Estrella Immunopharma and UroGen Pharma go up and down completely randomly.

Pair Corralation between Estrella Immunopharma and UroGen Pharma

Assuming the 90 days horizon Estrella Immunopharma is expected to generate 5.55 times more return on investment than UroGen Pharma. However, Estrella Immunopharma is 5.55 times more volatile than UroGen Pharma. It trades about 0.05 of its potential returns per unit of risk. UroGen Pharma is currently generating about 0.05 per unit of risk. If you would invest  8.79  in Estrella Immunopharma on December 30, 2024 and sell it today you would lose (1.08) from holding Estrella Immunopharma or give up 12.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.06%
Values	Daily Returns

Estrella Immunopharma  vs.  UroGen Pharma

Estrella Immunopharma

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Estrella Immunopharma are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Estrella Immunopharma showed solid returns over the last few months and may actually be approaching a breakup point.

UroGen Pharma

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UroGen Pharma are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, UroGen Pharma may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Estrella Immunopharma and UroGen Pharma

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

The idea behind Estrella Immunopharma and UroGen Pharma 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.