Correlation Between Collegium Pharmaceutical and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical and Sotera Health 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 Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and Sotera Health Co, you can compare the effects of market volatilities on Collegium Pharmaceutical and Sotera Health 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 Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and Sotera Health.
Diversification Opportunities for Collegium Pharmaceutical and Sotera Health
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Collegium and Sotera is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health 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 Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Sotera Health go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and Sotera Health
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to generate 2.43 times more return on investment than Sotera Health. However, Collegium Pharmaceutical is 2.43 times more volatile than Sotera Health Co. It trades about 0.16 of its potential returns per unit of risk. Sotera Health Co is currently generating about 0.03 per unit of risk. If you would invest 2,863 in Collegium Pharmaceutical on November 3, 2024 and sell it today you would earn a total of 349.00 from holding Collegium Pharmaceutical or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. Sotera Health Co
Performance |
| Timeline |
| Collegium Pharmaceutical |
| Sotera Health |
Collegium Pharmaceutical and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and Sotera Health
The main advantage of trading using opposite Collegium Pharmaceutical and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health'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 |
| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |