Correlation Between UroGen Pharma and GT Biopharma

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

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

Diversification Opportunities for UroGen Pharma and GT Biopharma

0.1

Correlation Coefficient

UroGen Pharma  GT Biopharma

Average diversification

The 3 months correlation between UroGen and GTBP is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding UroGen Pharma and GT Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GT Biopharma and UroGen Pharma 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 UroGen Pharma are associated (or correlated) with GT Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GT Biopharma has no effect on the direction of UroGen Pharma i.e., UroGen Pharma and GT Biopharma go up and down completely randomly.

Pair Corralation between UroGen Pharma and GT Biopharma

Given the investment horizon of 90 days UroGen Pharma is expected to generate 0.53 times more return on investment than GT Biopharma. However, UroGen Pharma is 1.89 times less risky than GT Biopharma. It trades about 0.06 of its potential returns per unit of risk. GT Biopharma is currently generating about -0.06 per unit of risk. If you would invest  1,052  in UroGen Pharma on December 28, 2024 and sell it today you would earn a total of  93.00  from holding UroGen Pharma or generate 8.84% return on investment over 90 days.

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

UroGen Pharma  vs.  GT Biopharma

UroGen Pharma

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UroGen Pharma are ranked lower than 4 (%) 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.

GT Biopharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days GT Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with UroGen Pharma and GT Biopharma

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

The idea behind UroGen Pharma and GT Biopharma 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.