Correlation Between AstraZeneca PLC and High Coast

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Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC and High Coast 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 AstraZeneca PLC and High Coast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC and High Coast Distillery, you can compare the effects of market volatilities on AstraZeneca PLC and High Coast 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 AstraZeneca PLC with a short position of High Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and High Coast.

Diversification Opportunities for AstraZeneca PLC and High Coast

-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between AstraZeneca and High is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC and High Coast Distillery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Coast Distillery and AstraZeneca PLC 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 AstraZeneca PLC are associated (or correlated) with High Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Coast Distillery has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and High Coast go up and down completely randomly.

Pair Corralation between AstraZeneca PLC and High Coast

Assuming the 90 days trading horizon AstraZeneca PLC is expected to under-perform the High Coast. But the stock apears to be less risky and, when comparing its historical volatility, AstraZeneca PLC is 1.63 times less risky than High Coast. The stock trades about -0.06 of its potential returns per unit of risk. The High Coast Distillery is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,500  in High Coast Distillery on September 1, 2024 and sell it today you would lose (20.00) from holding High Coast Distillery or give up 0.44% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

AstraZeneca PLC  vs.  High Coast Distillery

 Performance 
       Timeline  
AstraZeneca PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AstraZeneca PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
High Coast Distillery 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in High Coast Distillery are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, High Coast may actually be approaching a critical reversion point that can send shares even higher in December 2024.

AstraZeneca PLC and High Coast Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AstraZeneca PLC and High Coast

The main advantage of trading using opposite AstraZeneca PLC and High Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, High Coast 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 High Coast will offset losses from the drop in High Coast's long position.
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The idea behind AstraZeneca PLC and High Coast Distillery pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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