Correlation Between AstraZeneca PLC and Grifols SA
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC and Grifols SA 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 Grifols SA 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 Grifols SA ADR, you can compare the effects of market volatilities on AstraZeneca PLC and Grifols SA 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 Grifols SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and Grifols SA.
Diversification Opportunities for AstraZeneca PLC and Grifols SA
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AstraZeneca and Grifols is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC ADR and Grifols SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grifols SA ADR 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 Grifols SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grifols SA ADR has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and Grifols SA go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and Grifols SA
Considering the 90-day investment horizon AstraZeneca PLC ADR is expected to under-perform the Grifols SA. But the stock apears to be less risky and, when comparing its historical volatility, AstraZeneca PLC ADR is 1.58 times less risky than Grifols SA. The stock trades about -0.28 of its potential returns per unit of risk. The Grifols SA ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 834.00 in Grifols SA ADR on August 27, 2024 and sell it today you would earn a total of 26.00 from holding Grifols SA ADR or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AstraZeneca PLC ADR vs. Grifols SA ADR
Performance |
| Timeline |
| AstraZeneca PLC ADR |
| Grifols SA ADR |
AstraZeneca PLC and Grifols SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and Grifols SA
The main advantage of trading using opposite AstraZeneca PLC and Grifols SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, Grifols SA 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 Grifols SA will offset losses from the drop in Grifols SA's 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 |
| Grifols SA vs. Novartis AG ADR | Grifols SA vs. AstraZeneca PLC ADR | Grifols SA vs. GlaxoSmithKline PLC ADR | Grifols SA vs. Roche Holding Ltd |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |