Correlation Between AstraZeneca PLC and AstraZeneca PLC

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

Diversification Opportunities for AstraZeneca PLC and AstraZeneca PLC

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between AstraZeneca and AstraZeneca is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC and AstraZeneca PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC ADR has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and AstraZeneca PLC go up and down completely randomly.

Pair Corralation between AstraZeneca PLC and AstraZeneca PLC

Assuming the 90 days horizon AstraZeneca PLC is expected to generate 1.3 times more return on investment than AstraZeneca PLC. However, AstraZeneca PLC is 1.3 times more volatile than AstraZeneca PLC ADR. It trades about -0.2 of its potential returns per unit of risk. AstraZeneca PLC ADR is currently generating about -0.28 per unit of risk. If you would invest  14,860  in AstraZeneca PLC on August 28, 2024 and sell it today you would lose (1,713) from holding AstraZeneca PLC or give up 11.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy95.45%
ValuesDaily Returns

AstraZeneca PLC  vs.  AstraZeneca PLC ADR

 Performance 
       Timeline  
AstraZeneca PLC 

Risk-Adjusted Performance

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Over the last 90 days AstraZeneca PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
AstraZeneca PLC ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AstraZeneca PLC ADR 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 very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

AstraZeneca PLC and AstraZeneca PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AstraZeneca PLC and AstraZeneca PLC

The main advantage of trading using opposite AstraZeneca PLC and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.
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The idea behind AstraZeneca PLC and AstraZeneca PLC ADR 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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