Correlation Between Astellas Pharma and Sanofi ADR
Can any of the company-specific risk be diversified away by investing in both Astellas Pharma and Sanofi ADR 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 Astellas Pharma and Sanofi ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astellas Pharma and Sanofi ADR, you can compare the effects of market volatilities on Astellas Pharma and Sanofi ADR 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 Astellas Pharma with a short position of Sanofi ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astellas Pharma and Sanofi ADR.
Diversification Opportunities for Astellas Pharma and Sanofi ADR
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astellas and Sanofi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Astellas Pharma and Sanofi ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi ADR and Astellas Pharma 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 Astellas Pharma are associated (or correlated) with Sanofi ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi ADR has no effect on the direction of Astellas Pharma i.e., Astellas Pharma and Sanofi ADR go up and down completely randomly.
Pair Corralation between Astellas Pharma and Sanofi ADR
Assuming the 90 days horizon Astellas Pharma is expected to under-perform the Sanofi ADR. In addition to that, Astellas Pharma is 3.16 times more volatile than Sanofi ADR. It trades about -0.15 of its total potential returns per unit of risk. Sanofi ADR is currently generating about -0.47 per unit of volatility. If you would invest 5,436 in Sanofi ADR on August 27, 2024 and sell it today you would lose (601.00) from holding Sanofi ADR or give up 11.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astellas Pharma vs. Sanofi ADR
Performance |
| Timeline |
| Astellas Pharma |
| Sanofi ADR |
Astellas Pharma and Sanofi ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astellas Pharma and Sanofi ADR
The main advantage of trading using opposite Astellas Pharma and Sanofi ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astellas Pharma position performs unexpectedly, Sanofi ADR 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 Sanofi ADR will offset losses from the drop in Sanofi ADR's long position.| Astellas Pharma vs. Sanofi ADR | Astellas Pharma vs. Bristol Myers Squibb | Astellas Pharma vs. AstraZeneca PLC ADR | Astellas Pharma vs. Gilead Sciences |
| Sanofi ADR vs. AstraZeneca PLC ADR | Sanofi ADR vs. Roche Holding Ltd | Sanofi ADR vs. GlaxoSmithKline PLC ADR | Sanofi ADR vs. Merck Company |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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