Correlation Between Astellas Pharma and Luye Pharma
Can any of the company-specific risk be diversified away by investing in both Astellas Pharma and Luye 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 Astellas Pharma and Luye Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astellas Pharma and Luye Pharma Group, you can compare the effects of market volatilities on Astellas Pharma and Luye 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 Astellas Pharma with a short position of Luye Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astellas Pharma and Luye Pharma.
Diversification Opportunities for Astellas Pharma and Luye Pharma
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Astellas and Luye is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Astellas Pharma and Luye Pharma Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luye Pharma Group 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 Luye Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luye Pharma Group has no effect on the direction of Astellas Pharma i.e., Astellas Pharma and Luye Pharma go up and down completely randomly.
Pair Corralation between Astellas Pharma and Luye Pharma
Assuming the 90 days horizon Astellas Pharma is expected to under-perform the Luye Pharma. In addition to that, Astellas Pharma is 1.08 times more volatile than Luye Pharma Group. It trades about -0.22 of its total potential returns per unit of risk. Luye Pharma Group is currently generating about 0.22 per unit of volatility. If you would invest 31.00 in Luye Pharma Group on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Luye Pharma Group or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astellas Pharma vs. Luye Pharma Group
Performance |
| Timeline |
| Astellas Pharma |
| Luye Pharma Group |
Astellas Pharma and Luye Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astellas Pharma and Luye Pharma
The main advantage of trading using opposite Astellas Pharma and Luye Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astellas Pharma position performs unexpectedly, Luye 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 Luye Pharma will offset losses from the drop in Luye Pharma'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 |
| Luye Pharma vs. Astellas Pharma | Luye Pharma vs. Sanofi ADR | Luye Pharma vs. Amarin PLC | Luye Pharma vs. Novartis AG ADR |
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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