Correlation Between Marine Products and TuHURA Biosciences

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

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

Diversification Opportunities for Marine Products and TuHURA Biosciences

0.1

Correlation Coefficient

Marine Products  TuHURA Biosciences

Average diversification

The 3 months correlation between Marine and TuHURA is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and TuHURA Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuHURA Biosciences and Marine Products 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 Marine Products 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 Marine Products i.e., Marine Products and TuHURA Biosciences go up and down completely randomly.

Pair Corralation between Marine Products and TuHURA Biosciences

Considering the 90-day investment horizon Marine Products is expected to generate 0.15 times more return on investment than TuHURA Biosciences. However, Marine Products is 6.47 times less risky than TuHURA Biosciences. It trades about -0.02 of its potential returns per unit of risk. TuHURA Biosciences is currently generating about -0.01 per unit of risk. If you would invest  939.00  in Marine Products on October 7, 2024 and sell it today you would lose (24.00) from holding Marine Products or give up 2.56% of portfolio value over 90 days.

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

Marine Products  vs.  TuHURA Biosciences

Marine Products

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Marine Products and TuHURA Biosciences

The main advantage of trading using opposite Marine Products and TuHURA Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products 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 Marine Products 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.