Correlation Between Uniqure NV and Pliant Therapeutics

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

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

Diversification Opportunities for Uniqure NV and Pliant Therapeutics

0.79

Correlation Coefficient

Uniqure NV  Pliant Therapeutics

Poor diversification

The 3 months correlation between Uniqure and Pliant is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Uniqure NV and Pliant Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pliant Therapeutics and Uniqure NV 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 Uniqure NV are associated (or correlated) with Pliant Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pliant Therapeutics has no effect on the direction of Uniqure NV i.e., Uniqure NV and Pliant Therapeutics go up and down completely randomly.

Pair Corralation between Uniqure NV and Pliant Therapeutics

Given the investment horizon of 90 days Uniqure NV is expected to generate 1.64 times more return on investment than Pliant Therapeutics. However, Uniqure NV is 1.64 times more volatile than Pliant Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Pliant Therapeutics is currently generating about 0.05 per unit of risk. If you would invest  557.00  in Uniqure NV on September 3, 2024 and sell it today you would earn a total of  155.00  from holding Uniqure NV or generate 27.83% return on investment over 90 days.

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

Uniqure NV  vs.  Pliant Therapeutics

Uniqure NV

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Uniqure NV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Uniqure NV exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pliant Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pliant Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Pliant Therapeutics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Uniqure NV and Pliant Therapeutics

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

The idea behind Uniqure NV and Pliant Therapeutics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.