Correlation Between Bayer AG and Horizon Pharma
Can any of the company-specific risk be diversified away by investing in both Bayer AG and Horizon Pharma 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 Bayer AG and Horizon Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayer AG PK and Horizon Pharma PLC, you can compare the effects of market volatilities on Bayer AG and Horizon Pharma 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 Bayer AG with a short position of Horizon Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayer AG and Horizon Pharma.
Diversification Opportunities for Bayer AG and Horizon Pharma
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayer and Horizon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bayer AG PK and Horizon Pharma PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Pharma PLC and Bayer AG 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 Bayer AG PK are associated (or correlated) with Horizon Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Pharma PLC has no effect on the direction of Bayer AG i.e., Bayer AG and Horizon Pharma go up and down completely randomly.
Pair Corralation between Bayer AG and Horizon Pharma
If you would invest 10,040 in Horizon Pharma PLC on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Horizon Pharma PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayer AG PK vs. Horizon Pharma PLC
Performance |
| Timeline |
| Bayer AG PK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Horizon Pharma PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bayer AG and Horizon Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayer AG and Horizon Pharma
The main advantage of trading using opposite Bayer AG and Horizon Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayer AG position performs unexpectedly, Horizon Pharma 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 Horizon Pharma will offset losses from the drop in Horizon Pharma's long position.| Bayer AG vs. Novartis AG ADR | Bayer AG vs. Sanofi ADR | Bayer AG vs. AstraZeneca PLC ADR | Bayer AG vs. GlaxoSmithKline PLC ADR |
| Horizon Pharma vs. Bristol Myers Squibb | Horizon Pharma vs. AbbVie Inc | Horizon Pharma vs. Merck Company | Horizon Pharma vs. Gilead Sciences |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |