Correlation Between Universe Pharmaceuticals and Exicure

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

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

Diversification Opportunities for Universe Pharmaceuticals and Exicure

-0.58

Correlation Coefficient

Universe Pharmaceuticals  Exicure

Excellent diversification

The 3 months correlation between Universe and Exicure is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Universe Pharmaceuticals and Exicure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exicure and Universe Pharmaceuticals 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 Universe Pharmaceuticals are associated (or correlated) with Exicure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exicure has no effect on the direction of Universe Pharmaceuticals i.e., Universe Pharmaceuticals and Exicure go up and down completely randomly.

Pair Corralation between Universe Pharmaceuticals and Exicure

Considering the 90-day investment horizon Universe Pharmaceuticals is expected to under-perform the Exicure. In addition to that, Universe Pharmaceuticals is 1.44 times more volatile than Exicure. It trades about -0.04 of its total potential returns per unit of risk. Exicure is currently generating about 0.2 per unit of volatility. If you would invest  233.00  in Exicure on October 24, 2024 and sell it today you would earn a total of  774.00  from holding Exicure or generate 332.19% return on investment over 90 days.

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

Universe Pharmaceuticals  vs.  Exicure

Universe Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Universe Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Exicure

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Exicure are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Exicure reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Universe Pharmaceuticals and Exicure

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

The idea behind Universe Pharmaceuticals and Exicure 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 Anywhere module to track or share privately all of your investments from the convenience of any device.