Correlation Between Amphastar and Durect
Can any of the company-specific risk be diversified away by investing in both Amphastar and Durect 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 Amphastar and Durect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amphastar P and Durect, you can compare the effects of market volatilities on Amphastar and Durect 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 Amphastar with a short position of Durect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amphastar and Durect.
Diversification Opportunities for Amphastar and Durect
Poor diversification
The 3 months correlation between Amphastar and Durect is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Amphastar P and Durect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Durect and Amphastar 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 Amphastar P are associated (or correlated) with Durect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Durect has no effect on the direction of Amphastar i.e., Amphastar and Durect go up and down completely randomly.
Pair Corralation between Amphastar and Durect
Given the investment horizon of 90 days Amphastar P is expected to under-perform the Durect. But the stock apears to be less risky and, when comparing its historical volatility, Amphastar P is 1.72 times less risky than Durect. The stock trades about -0.44 of its potential returns per unit of risk. The Durect is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Durect on November 18, 2024 and sell it today you would lose (8.00) from holding Durect or give up 9.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amphastar P vs. Durect
Performance |
| Timeline |
| Amphastar P |
| Durect |
Amphastar and Durect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amphastar and Durect
The main advantage of trading using opposite Amphastar and Durect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amphastar position performs unexpectedly, Durect 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 Durect will offset losses from the drop in Durect's long position.| Amphastar vs. Collegium Pharmaceutical | Amphastar vs. Alkermes Plc | Amphastar vs. Evolus Inc | Amphastar vs. Neurocrine Biosciences |
| Durect vs. Shuttle Pharmaceuticals | Durect vs. Organogenesis Holdings | Durect vs. Alpha Teknova | Durect vs. Sonoma Pharmaceuticals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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