Correlation Between H M and AlzeCure Pharma
Can any of the company-specific risk be diversified away by investing in both H M and AlzeCure Pharma 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 H M and AlzeCure Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H M Hennes and AlzeCure Pharma, you can compare the effects of market volatilities on H M and AlzeCure Pharma 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 H M with a short position of AlzeCure Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of H M and AlzeCure Pharma.
Diversification Opportunities for H M and AlzeCure Pharma
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HM-B and AlzeCure is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding H M Hennes and AlzeCure Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlzeCure Pharma and H M 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 H M Hennes are associated (or correlated) with AlzeCure Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlzeCure Pharma has no effect on the direction of H M i.e., H M and AlzeCure Pharma go up and down completely randomly.
Pair Corralation between H M and AlzeCure Pharma
Assuming the 90 days trading horizon H M is expected to generate 1.45 times less return on investment than AlzeCure Pharma. But when comparing it to its historical volatility, H M Hennes is 3.34 times less risky than AlzeCure Pharma. It trades about 0.35 of its potential returns per unit of risk. AlzeCure Pharma is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 179.00 in AlzeCure Pharma on March 9, 2024 and sell it today you would earn a total of 23.00 from holding AlzeCure Pharma or generate 12.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
H M Hennes vs. AlzeCure Pharma
Performance |
Timeline |
H M Hennes |
AlzeCure Pharma |
H M and AlzeCure Pharma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with H M and AlzeCure Pharma
The main advantage of trading using opposite H M and AlzeCure Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H M position performs unexpectedly, AlzeCure Pharma 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 AlzeCure Pharma will offset losses from the drop in AlzeCure Pharma's long position.H M vs. Telefonaktiebolaget LM Ericsson | H M vs. Swedbank AB | H M vs. AB Electrolux | H M vs. Investor AB ser |
AlzeCure Pharma vs. Oncopeptides AB | AlzeCure Pharma vs. BioArctic AB | AlzeCure Pharma vs. Hansa Biopharma AB | AlzeCure Pharma vs. Camurus AB |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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