Correlation Between UroGen Pharma and Regen BioPharma

Can any of the company-specific risk be diversified away by investing in both UroGen Pharma and Regen 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 Regen 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 Regen BioPharma, you can compare the effects of market volatilities on UroGen Pharma and Regen 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 Regen BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of UroGen Pharma and Regen BioPharma.

Diversification Opportunities for UroGen Pharma and Regen BioPharma

0.09

Correlation Coefficient

UroGen Pharma  Regen BioPharma

Significant diversification

The 3 months correlation between UroGen and Regen is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding UroGen Pharma and Regen BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regen 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 Regen BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regen BioPharma has no effect on the direction of UroGen Pharma i.e., UroGen Pharma and Regen BioPharma go up and down completely randomly.

Pair Corralation between UroGen Pharma and Regen BioPharma

Given the investment horizon of 90 days UroGen Pharma is expected to under-perform the Regen BioPharma. But the stock apears to be less risky and, when comparing its historical volatility, UroGen Pharma is 15.97 times less risky than Regen BioPharma. The stock trades about -0.02 of its potential returns per unit of risk. The Regen BioPharma is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Regen BioPharma on September 2, 2024 and sell it today you would lose (9.96) from holding Regen BioPharma or give up 55.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

UroGen Pharma  vs.  Regen BioPharma

UroGen Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UroGen Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, UroGen Pharma is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Regen BioPharma

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regen BioPharma are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Regen BioPharma reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UroGen Pharma and Regen BioPharma

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

The idea behind UroGen Pharma and Regen 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.