Correlation Between Collegium Pharmaceutical and Assertio Therapeutics
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical and Assertio Therapeutics 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 Collegium Pharmaceutical and Assertio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and Assertio Therapeutics, you can compare the effects of market volatilities on Collegium Pharmaceutical and Assertio Therapeutics 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 Collegium Pharmaceutical with a short position of Assertio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and Assertio Therapeutics.
Diversification Opportunities for Collegium Pharmaceutical and Assertio Therapeutics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Collegium and Assertio is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Assertio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assertio Therapeutics and Collegium Pharmaceutical 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 Collegium Pharmaceutical are associated (or correlated) with Assertio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assertio Therapeutics has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Assertio Therapeutics go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and Assertio Therapeutics
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to under-perform the Assertio Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Collegium Pharmaceutical is 2.57 times less risky than Assertio Therapeutics. The stock trades about -0.29 of its potential returns per unit of risk. The Assertio Therapeutics is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Assertio Therapeutics on August 24, 2024 and sell it today you would lose (9.00) from holding Assertio Therapeutics or give up 8.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. Assertio Therapeutics
Performance |
| Timeline |
| Collegium Pharmaceutical |
| Assertio Therapeutics |
Collegium Pharmaceutical and Assertio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and Assertio Therapeutics
The main advantage of trading using opposite Collegium Pharmaceutical and Assertio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical position performs unexpectedly, Assertio Therapeutics 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 Assertio Therapeutics will offset losses from the drop in Assertio Therapeutics' long position.| Collegium Pharmaceutical vs. Phibro Animal Health | Collegium Pharmaceutical vs. ANI Pharmaceuticals | Collegium Pharmaceutical vs. Procaps Group SA | Collegium Pharmaceutical vs. Amphastar P |
| Assertio Therapeutics vs. Amneal Pharmaceuticals, Class | Assertio Therapeutics vs. Lifecore Biomedical | Assertio Therapeutics vs. Ironwood Pharmaceuticals | Assertio Therapeutics vs. Neurocrine Biosciences |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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