Correlation Between Collegium Pharmaceutical and INC Research
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical and INC Research 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 INC Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and INC Research Holdings, you can compare the effects of market volatilities on Collegium Pharmaceutical and INC Research 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 INC Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and INC Research.
Diversification Opportunities for Collegium Pharmaceutical and INC Research
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Collegium and INC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and INC Research Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INC Research Holdings 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 INC Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INC Research Holdings has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and INC Research go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and INC Research
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to generate 0.39 times more return on investment than INC Research. However, Collegium Pharmaceutical is 2.59 times less risky than INC Research. It trades about -0.24 of its potential returns per unit of risk. INC Research Holdings is currently generating about -0.12 per unit of risk. If you would invest 3,513 in Collegium Pharmaceutical on August 27, 2024 and sell it today you would lose (434.00) from holding Collegium Pharmaceutical or give up 12.35% 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. INC Research Holdings
Performance |
| Timeline |
| Collegium Pharmaceutical |
| INC Research Holdings |
Collegium Pharmaceutical and INC Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and INC Research
The main advantage of trading using opposite Collegium Pharmaceutical and INC Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical position performs unexpectedly, INC Research 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 INC Research will offset losses from the drop in INC Research'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 |
| INC Research vs. AYR Strategies Class | INC Research vs. Verano Holdings Corp | INC Research vs. TILT Holdings | INC Research vs. Lowell Farms |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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