Correlation Between United Parks and TuHURA Biosciences

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

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

Diversification Opportunities for United Parks and TuHURA Biosciences

-0.28

Correlation Coefficient

United Parks  TuHURA Biosciences

Very good diversification

The 3 months correlation between United and TuHURA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding United Parks Resorts and TuHURA Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuHURA Biosciences and United Parks 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 United Parks Resorts 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 United Parks i.e., United Parks and TuHURA Biosciences go up and down completely randomly.

Pair Corralation between United Parks and TuHURA Biosciences

Given the investment horizon of 90 days United Parks is expected to generate 6.48 times less return on investment than TuHURA Biosciences. But when comparing it to its historical volatility, United Parks Resorts is 6.55 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 0.02 of returns per unit of risk over similar time horizon. If you would invest  527.00  in TuHURA Biosciences on October 7, 2024 and sell it today you would lose (78.00) from holding TuHURA Biosciences or give up 14.8% of portfolio value over 90 days.

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

United Parks Resorts  vs.  TuHURA Biosciences

United Parks Resorts

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United Parks Resorts are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward-looking signals, United Parks unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 United Parks and TuHURA Biosciences

The main advantage of trading using opposite United Parks and TuHURA Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parks 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 United Parks Resorts 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.