Correlation Between Collegium Pharmaceutical and Procaps Group
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical and Procaps Group 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 Procaps Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and Procaps Group SA, you can compare the effects of market volatilities on Collegium Pharmaceutical and Procaps Group 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 Procaps Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and Procaps Group.
Diversification Opportunities for Collegium Pharmaceutical and Procaps Group
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Collegium and Procaps is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Procaps Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procaps Group SA 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 Procaps Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procaps Group SA has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Procaps Group go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and Procaps Group
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to generate 0.36 times more return on investment than Procaps Group. However, Collegium Pharmaceutical is 2.75 times less risky than Procaps Group. It trades about 0.04 of its potential returns per unit of risk. Procaps Group SA is currently generating about -0.03 per unit of risk. If you would invest 2,240 in Collegium Pharmaceutical on August 27, 2024 and sell it today you would earn a total of 756.00 from holding Collegium Pharmaceutical or generate 33.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. Procaps Group SA
Performance |
| Timeline |
| Collegium Pharmaceutical |
| Procaps Group SA |
Collegium Pharmaceutical and Procaps Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and Procaps Group
The main advantage of trading using opposite Collegium Pharmaceutical and Procaps Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical position performs unexpectedly, Procaps Group 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 Procaps Group will offset losses from the drop in Procaps Group'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 |
| Procaps Group vs. Phibro Animal Health | Procaps Group vs. Delta 9 Cannabis | Procaps Group vs. City View Green | Procaps Group vs. Benchmark Botanics |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |