Correlation Between Halo Collective and Pacira Pharmaceuticals

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

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

Diversification Opportunities for Halo Collective and Pacira Pharmaceuticals

0.16

Correlation Coefficient

Halo Collective  Pacira Pharmaceuticals

Average diversification

The 3 months correlation between Halo and Pacira is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Halo Collective and Pacira Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacira Pharmaceuticals and Halo Collective 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 Halo Collective are associated (or correlated) with Pacira Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacira Pharmaceuticals has no effect on the direction of Halo Collective i.e., Halo Collective and Pacira Pharmaceuticals go up and down completely randomly.

Pair Corralation between Halo Collective and Pacira Pharmaceuticals

Assuming the 90 days horizon Halo Collective is expected to generate 51.74 times more return on investment than Pacira Pharmaceuticals. However, Halo Collective is 51.74 times more volatile than Pacira Pharmaceuticals. It trades about 0.13 of its potential returns per unit of risk. Pacira Pharmaceuticals is currently generating about 0.04 per unit of risk. If you would invest  0.00  in Halo Collective on March 4, 2024 and sell it today you would earn a total of  0.01  from holding Halo Collective or generate 9.223372036854776E16% return on investment over 90 days.

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

Halo Collective  vs.  Pacira Pharmaceuticals

Halo Collective

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Halo Collective are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Halo Collective reported solid returns over the last few months and may actually be approaching a breakup point.

Pacira Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pacira Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Pacira Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Halo Collective and Pacira Pharmaceuticals

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

The idea behind Halo Collective and Pacira Pharmaceuticals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.