Correlation Between Inventiva and UroGen Pharma

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

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

Diversification Opportunities for Inventiva and UroGen Pharma

-0.06

Correlation Coefficient

Inventiva  UroGen Pharma

Good diversification

The 3 months correlation between Inventiva and UroGen is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and UroGen Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UroGen Pharma and Inventiva 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 Inventiva Sa 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 Inventiva i.e., Inventiva and UroGen Pharma go up and down completely randomly.

Pair Corralation between Inventiva and UroGen Pharma

Considering the 90-day investment horizon Inventiva Sa is expected to generate 1.46 times more return on investment than UroGen Pharma. However, Inventiva is 1.46 times more volatile than UroGen Pharma. It trades about 0.12 of its potential returns per unit of risk. UroGen Pharma is currently generating about 0.05 per unit of risk. If you would invest  227.00  in Inventiva Sa on December 29, 2024 and sell it today you would earn a total of  64.00  from holding Inventiva Sa or generate 28.19% return on investment over 90 days.

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

Inventiva Sa  vs.  UroGen Pharma

Inventiva Sa

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inventiva Sa are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Inventiva sustained 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 Inventiva and UroGen Pharma

The main advantage of trading using opposite Inventiva and UroGen Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventiva 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 Inventiva Sa 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.