Correlation Between G1 Therapeutics and Heron Therapeuti

Can any of the company-specific risk be diversified away by investing in both G1 Therapeutics and Heron Therapeuti 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 G1 Therapeutics and Heron Therapeuti into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G1 Therapeutics and Heron Therapeuti, you can compare the effects of market volatilities on G1 Therapeutics and Heron Therapeuti 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 G1 Therapeutics with a short position of Heron Therapeuti. Check out your portfolio center. Please also check ongoing floating volatility patterns of G1 Therapeutics and Heron Therapeuti.

Diversification Opportunities for G1 Therapeutics and Heron Therapeuti

-0.08

Correlation Coefficient

G1 Therapeutics  Heron Therapeuti

Good diversification

The 3 months correlation between GTHX and Heron is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding G1 Therapeutics and Heron Therapeuti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heron Therapeuti and G1 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 G1 Therapeutics are associated (or correlated) with Heron Therapeuti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heron Therapeuti has no effect on the direction of G1 Therapeutics i.e., G1 Therapeutics and Heron Therapeuti go up and down completely randomly.

Pair Corralation between G1 Therapeutics and Heron Therapeuti

If you would invest  181.00  in Heron Therapeuti on October 19, 2024 and sell it today you would lose (18.00) from holding Heron Therapeuti or give up 9.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

G1 Therapeutics  vs.  Heron Therapeuti

G1 Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G1 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, G1 Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Heron Therapeuti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heron Therapeuti has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Heron Therapeuti is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with G1 Therapeutics and Heron Therapeuti

The main advantage of trading using opposite G1 Therapeutics and Heron Therapeuti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G1 Therapeutics position performs unexpectedly, Heron Therapeuti 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 Heron Therapeuti will offset losses from the drop in Heron Therapeuti's long position.

The idea behind G1 Therapeutics and Heron Therapeuti 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.