Correlation Between Collegium Pharmaceutical and AYR Strategies
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical and AYR Strategies 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 AYR Strategies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and AYR Strategies Class, you can compare the effects of market volatilities on Collegium Pharmaceutical and AYR Strategies 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 AYR Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and AYR Strategies.
Diversification Opportunities for Collegium Pharmaceutical and AYR Strategies
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Collegium and AYR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and AYR Strategies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYR Strategies Class 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 AYR Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AYR Strategies Class has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and AYR Strategies go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and AYR Strategies
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to generate 0.32 times more return on investment than AYR Strategies. However, Collegium Pharmaceutical is 3.15 times less risky than AYR Strategies. It trades about 0.04 of its potential returns per unit of risk. AYR Strategies Class is currently generating about 0.01 per unit of risk. If you would invest 2,185 in Collegium Pharmaceutical on September 2, 2024 and sell it today you would earn a total of 865.00 from holding Collegium Pharmaceutical or generate 39.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. AYR Strategies Class
Performance |
| Timeline |
| Collegium Pharmaceutical |
| AYR Strategies Class |
Collegium Pharmaceutical and AYR Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and AYR Strategies
The main advantage of trading using opposite Collegium Pharmaceutical and AYR Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical position performs unexpectedly, AYR Strategies 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 AYR Strategies will offset losses from the drop in AYR Strategies' long position.| Collegium Pharmaceutical vs. Phibro Animal Health | Collegium Pharmaceutical vs. ANI Pharmaceuticals | Collegium Pharmaceutical vs. Procaps Group SA | Collegium Pharmaceutical vs. Amphastar P |
| AYR Strategies vs. Green Thumb Industries | AYR Strategies vs. Trulieve Cannabis Corp | AYR Strategies vs. Goodness Growth Holdings | AYR Strategies vs. Verano Holdings Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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