Correlation Between Eupraxia Pharmaceuticals and TuHURA Biosciences

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

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

Diversification Opportunities for Eupraxia Pharmaceuticals and TuHURA Biosciences

-0.55

Correlation Coefficient

Eupraxia Pharmaceuticals  TuHURA Biosciences

Excellent diversification

The 3 months correlation between Eupraxia and TuHURA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eupraxia Pharmaceuticals Commo and TuHURA Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuHURA Biosciences and Eupraxia 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 Eupraxia Pharmaceuticals Common 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 Eupraxia Pharmaceuticals i.e., Eupraxia Pharmaceuticals and TuHURA Biosciences go up and down completely randomly.

Pair Corralation between Eupraxia Pharmaceuticals and TuHURA Biosciences

Given the investment horizon of 90 days Eupraxia Pharmaceuticals Common is expected to under-perform the TuHURA Biosciences. But the pink sheet apears to be less risky and, when comparing its historical volatility, Eupraxia Pharmaceuticals Common is 3.29 times less risky than TuHURA Biosciences. The pink sheet trades about -0.11 of its potential returns per unit of risk. The TuHURA Biosciences is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  505.00  in TuHURA Biosciences on September 28, 2024 and sell it today you would lose (60.00) from holding TuHURA Biosciences or give up 11.88% of portfolio value over 90 days.

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

Eupraxia Pharmaceuticals Commo  vs.  TuHURA Biosciences

Eupraxia Pharmaceuticals

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eupraxia Pharmaceuticals Common are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Eupraxia Pharmaceuticals showed 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 somewhat strong basic indicators, TuHURA Biosciences is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eupraxia Pharmaceuticals and TuHURA Biosciences

The main advantage of trading using opposite Eupraxia Pharmaceuticals and TuHURA Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eupraxia Pharmaceuticals 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 Eupraxia Pharmaceuticals Common 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.