Correlation Between British Amer and Santhera Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both British Amer and Santhera 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 British Amer and Santhera Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Santhera Pharmaceuticals Holding, you can compare the effects of market volatilities on British Amer and Santhera 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 British Amer with a short position of Santhera Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Santhera Pharmaceuticals.
Diversification Opportunities for British Amer and Santhera Pharmaceuticals
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between British and Santhera is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Santhera Pharmaceuticals Holdi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santhera Pharmaceuticals and British Amer 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 British American Tobacco are associated (or correlated) with Santhera Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santhera Pharmaceuticals has no effect on the direction of British Amer i.e., British Amer and Santhera Pharmaceuticals go up and down completely randomly.
Pair Corralation between British Amer and Santhera Pharmaceuticals
If you would invest 3,626 in British American Tobacco on October 25, 2024 and sell it today you would earn a total of 31.00 from holding British American Tobacco or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. Santhera Pharmaceuticals Holdi
Performance |
| Timeline |
| British American Tobacco |
| Santhera Pharmaceuticals |
British Amer and Santhera Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Santhera Pharmaceuticals
The main advantage of trading using opposite British Amer and Santhera Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Santhera 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 Santhera Pharmaceuticals will offset losses from the drop in Santhera Pharmaceuticals' long position.| British Amer vs. Philip Morris International | British Amer vs. Universal | British Amer vs. Imperial Brands PLC | British Amer vs. Altria Group |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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