Correlation Between TG Therapeutics and Geron

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

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

Diversification Opportunities for TG Therapeutics and Geron

0.51

Correlation Coefficient

TG Therapeutics  Geron

Very weak diversification

The 3 months correlation between TGTX and Geron is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding TG Therapeutics and Geron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geron and TG 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 TG Therapeutics are associated (or correlated) with Geron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geron has no effect on the direction of TG Therapeutics i.e., TG Therapeutics and Geron go up and down completely randomly.

Pair Corralation between TG Therapeutics and Geron

Given the investment horizon of 90 days TG Therapeutics is expected to generate 0.68 times more return on investment than Geron. However, TG Therapeutics is 1.48 times less risky than Geron. It trades about -0.07 of its potential returns per unit of risk. Geron is currently generating about -0.3 per unit of risk. If you would invest  3,480  in TG Therapeutics on November 29, 2024 and sell it today you would lose (546.00) from holding TG Therapeutics or give up 15.69% of portfolio value over 90 days.

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

TG Therapeutics  vs.  Geron

TG Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days TG Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Geron

Risk-Adjusted Performance

Very Weak

Over the last 90 days Geron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with TG Therapeutics and Geron

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

The idea behind TG Therapeutics and Geron 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.