Correlation Between AstraZeneca PLC and Aurinia Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC and Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC ADR and Aurinia Pharmaceuticals, you can compare the effects of market volatilities on AstraZeneca PLC and Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and Aurinia Pharmaceuticals.
Diversification Opportunities for AstraZeneca PLC and Aurinia Pharmaceuticals
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between AstraZeneca and Aurinia is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC ADR and Aurinia Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurinia Pharmaceuticals 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 ADR are associated (or correlated) with Aurinia Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurinia Pharmaceuticals has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and Aurinia Pharmaceuticals go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and Aurinia Pharmaceuticals
Considering the 90-day investment horizon AstraZeneca PLC ADR is expected to generate 0.42 times more return on investment than Aurinia Pharmaceuticals. However, AstraZeneca PLC ADR is 2.39 times less risky than Aurinia Pharmaceuticals. It trades about 0.36 of its potential returns per unit of risk. Aurinia Pharmaceuticals is currently generating about -0.19 per unit of risk. If you would invest 6,588 in AstraZeneca PLC ADR on November 3, 2024 and sell it today you would earn a total of 488.00 from holding AstraZeneca PLC ADR or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
AstraZeneca PLC ADR vs. Aurinia Pharmaceuticals
Performance |
| Timeline |
| AstraZeneca PLC ADR |
| Aurinia Pharmaceuticals |
AstraZeneca PLC and Aurinia Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and Aurinia Pharmaceuticals
The main advantage of trading using opposite AstraZeneca PLC and Aurinia Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals will offset losses from the drop in Aurinia Pharmaceuticals' long position.| AstraZeneca PLC vs. Novartis AG ADR | AstraZeneca PLC vs. GlaxoSmithKline PLC ADR | AstraZeneca PLC vs. Roche Holding Ltd | AstraZeneca PLC vs. Bristol Myers Squibb |
| Aurinia Pharmaceuticals vs. Viking Therapeutics | Aurinia Pharmaceuticals vs. Axsome Therapeutics | Aurinia Pharmaceuticals vs. Madrigal Pharmaceuticals | Aurinia Pharmaceuticals vs. Seres Therapeutics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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