Correlation Between Assertio Therapeutics and HUTCHMED DRC
Can any of the company-specific risk be diversified away by investing in both Assertio Therapeutics and HUTCHMED DRC 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 Assertio Therapeutics and HUTCHMED DRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assertio Therapeutics and HUTCHMED DRC, you can compare the effects of market volatilities on Assertio Therapeutics and HUTCHMED DRC 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 Assertio Therapeutics with a short position of HUTCHMED DRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assertio Therapeutics and HUTCHMED DRC.
Diversification Opportunities for Assertio Therapeutics and HUTCHMED DRC
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Assertio and HUTCHMED is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Assertio Therapeutics and HUTCHMED DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHMED DRC and Assertio Therapeutics 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 Assertio Therapeutics are associated (or correlated) with HUTCHMED DRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHMED DRC has no effect on the direction of Assertio Therapeutics i.e., Assertio Therapeutics and HUTCHMED DRC go up and down completely randomly.
Pair Corralation between Assertio Therapeutics and HUTCHMED DRC
Given the investment horizon of 90 days Assertio Therapeutics is expected to generate 2.03 times more return on investment than HUTCHMED DRC. However, Assertio Therapeutics is 2.03 times more volatile than HUTCHMED DRC. It trades about 0.01 of its potential returns per unit of risk. HUTCHMED DRC is currently generating about -0.13 per unit of risk. If you would invest 103.00 in Assertio Therapeutics on September 2, 2024 and sell it today you would lose (3.00) from holding Assertio Therapeutics or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assertio Therapeutics vs. HUTCHMED DRC
Performance |
| Timeline |
| Assertio Therapeutics |
| HUTCHMED DRC |
Assertio Therapeutics and HUTCHMED DRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assertio Therapeutics and HUTCHMED DRC
The main advantage of trading using opposite Assertio Therapeutics and HUTCHMED DRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assertio Therapeutics position performs unexpectedly, HUTCHMED DRC 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 HUTCHMED DRC will offset losses from the drop in HUTCHMED DRC's long position.| Assertio Therapeutics vs. Amneal Pharmaceuticals, Class | Assertio Therapeutics vs. Lifecore Biomedical | Assertio Therapeutics vs. Ironwood Pharmaceuticals | Assertio Therapeutics vs. Neurocrine Biosciences |
| HUTCHMED DRC vs. ANI Pharmaceuticals | HUTCHMED DRC vs. Phibro Animal Health | HUTCHMED DRC vs. Prestige Brand Holdings | HUTCHMED DRC vs. Pacira BioSciences, |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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