Correlation Between Collegium Pharmaceutical and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical and Avient Corp 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 Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and Avient Corp, you can compare the effects of market volatilities on Collegium Pharmaceutical and Avient Corp 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 Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and Avient Corp.
Diversification Opportunities for Collegium Pharmaceutical and Avient Corp
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Collegium and Avient is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp 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 Avient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avient Corp has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Avient Corp go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and Avient Corp
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to under-perform the Avient Corp. In addition to that, Collegium Pharmaceutical is 1.26 times more volatile than Avient Corp. It trades about -0.4 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.02 per unit of volatility. If you would invest 4,316 in Avient Corp on November 27, 2024 and sell it today you would earn a total of 18.00 from holding Avient Corp or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. Avient Corp
Performance |
| Timeline |
| Collegium Pharmaceutical |
| Avient Corp |
Collegium Pharmaceutical and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and Avient Corp
The main advantage of trading using opposite Collegium Pharmaceutical and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical position performs unexpectedly, Avient Corp 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 Avient Corp will offset losses from the drop in Avient Corp's long position.| Collegium Pharmaceutical vs. Phibro Animal Health | Collegium Pharmaceutical vs. ANI Pharmaceuticals | Collegium Pharmaceutical vs. Procaps Group SA | Collegium Pharmaceutical vs. Amphastar P |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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