Correlation Between Alkermes Plc and ANI Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Alkermes Plc and ANI 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 Alkermes Plc and ANI Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkermes Plc and ANI Pharmaceuticals, you can compare the effects of market volatilities on Alkermes Plc and ANI 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 Alkermes Plc with a short position of ANI Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkermes Plc and ANI Pharmaceuticals.
Diversification Opportunities for Alkermes Plc and ANI Pharmaceuticals
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alkermes and ANI is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alkermes Plc and ANI Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANI Pharmaceuticals and Alkermes Plc 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 Alkermes Plc are associated (or correlated) with ANI Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANI Pharmaceuticals has no effect on the direction of Alkermes Plc i.e., Alkermes Plc and ANI Pharmaceuticals go up and down completely randomly.
Pair Corralation between Alkermes Plc and ANI Pharmaceuticals
Given the investment horizon of 90 days Alkermes Plc is expected to under-perform the ANI Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Alkermes Plc is 1.2 times less risky than ANI Pharmaceuticals. The stock trades about -0.01 of its potential returns per unit of risk. The ANI Pharmaceuticals is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,025 in ANI Pharmaceuticals on August 23, 2024 and sell it today you would lose (439.00) from holding ANI Pharmaceuticals or give up 7.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alkermes Plc vs. ANI Pharmaceuticals
Performance |
| Timeline |
| Alkermes Plc |
| ANI Pharmaceuticals |
Alkermes Plc and ANI Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkermes Plc and ANI Pharmaceuticals
The main advantage of trading using opposite Alkermes Plc and ANI Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkermes Plc position performs unexpectedly, ANI 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 ANI Pharmaceuticals will offset losses from the drop in ANI Pharmaceuticals' long position.| Alkermes Plc vs. Intracellular Th | Alkermes Plc vs. Ironwood Pharmaceuticals | Alkermes Plc vs. Pacira BioSciences, | Alkermes Plc vs. ANI Pharmaceuticals |
| ANI Pharmaceuticals vs. Phibro Animal Health | ANI Pharmaceuticals vs. Prestige Brand Holdings | ANI Pharmaceuticals vs. Alkermes Plc | ANI Pharmaceuticals vs. Dr Reddys Laboratories |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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