Correlation Between Astellas Pharma and Biogen
Can any of the company-specific risk be diversified away by investing in both Astellas Pharma and Biogen 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 Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astellas Pharma and Biogen Inc, you can compare the effects of market volatilities on Astellas Pharma and Biogen 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 Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astellas Pharma and Biogen.
Diversification Opportunities for Astellas Pharma and Biogen
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Astellas and Biogen is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Astellas Pharma and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of Astellas Pharma i.e., Astellas Pharma and Biogen go up and down completely randomly.
Pair Corralation between Astellas Pharma and Biogen
Assuming the 90 days horizon Astellas Pharma is expected to generate 1.16 times more return on investment than Biogen. However, Astellas Pharma is 1.16 times more volatile than Biogen Inc. It trades about 0.03 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.16 per unit of risk. If you would invest 969.00 in Astellas Pharma on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Astellas Pharma or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Astellas Pharma vs. Biogen Inc
Performance |
| Timeline |
| Astellas Pharma |
| Biogen Inc |
Astellas Pharma and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astellas Pharma and Biogen
The main advantage of trading using opposite Astellas Pharma and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astellas Pharma position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen'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 |
| Biogen vs. Bristol Myers Squibb | Biogen vs. AbbVie Inc | Biogen vs. Merck Company | Biogen vs. Gilead Sciences |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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