Correlation Between AstraZeneca PLC and Otsuka Holdings
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC and Otsuka Holdings 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 Otsuka Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC and Otsuka Holdings Co, you can compare the effects of market volatilities on AstraZeneca PLC and Otsuka Holdings 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 Otsuka Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and Otsuka Holdings.
Diversification Opportunities for AstraZeneca PLC and Otsuka Holdings
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AstraZeneca and Otsuka is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC and Otsuka Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka Holdings 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 Otsuka Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka Holdings has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and Otsuka Holdings go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and Otsuka Holdings
Assuming the 90 days horizon AstraZeneca PLC is expected to under-perform the Otsuka Holdings. In addition to that, AstraZeneca PLC is 1.76 times more volatile than Otsuka Holdings Co. It trades about -0.2 of its total potential returns per unit of risk. Otsuka Holdings Co is currently generating about -0.1 per unit of volatility. If you would invest 2,990 in Otsuka Holdings Co on August 27, 2024 and sell it today you would lose (107.00) from holding Otsuka Holdings Co or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AstraZeneca PLC vs. Otsuka Holdings Co
Performance |
| Timeline |
| AstraZeneca PLC |
| Otsuka Holdings |
AstraZeneca PLC and Otsuka Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and Otsuka Holdings
The main advantage of trading using opposite AstraZeneca PLC and Otsuka Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, Otsuka Holdings 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 Otsuka Holdings will offset losses from the drop in Otsuka Holdings' long position.| AstraZeneca PLC vs. Roche Holding AG | AstraZeneca PLC vs. Roche Holding AG | AstraZeneca PLC vs. Roche Holding Ltd | AstraZeneca PLC vs. Grifols SA ADR |
| Otsuka Holdings vs. Pfizer Inc | Otsuka Holdings vs. Astellas Pharma | Otsuka Holdings vs. Bristol Myers Squibb | Otsuka Holdings vs. Bayer AG |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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