Correlation Between Collegium Pharmaceutical and Silver Spike
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical and Silver Spike 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 Silver Spike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and Silver Spike Investment, you can compare the effects of market volatilities on Collegium Pharmaceutical and Silver Spike 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 Silver Spike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and Silver Spike.
Diversification Opportunities for Collegium Pharmaceutical and Silver Spike
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Collegium and Silver is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Silver Spike Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spike Investment 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 Silver Spike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spike Investment has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Silver Spike go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and Silver Spike
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to under-perform the Silver Spike. In addition to that, Collegium Pharmaceutical is 1.47 times more volatile than Silver Spike Investment. It trades about -0.03 of its total potential returns per unit of risk. Silver Spike Investment is currently generating about 0.11 per unit of volatility. If you would invest 1,082 in Silver Spike Investment on August 24, 2024 and sell it today you would earn a total of 201.01 from holding Silver Spike Investment or generate 18.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.4% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. Silver Spike Investment
Performance |
| Timeline |
| Collegium Pharmaceutical |
| Silver Spike Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Collegium Pharmaceutical and Silver Spike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and Silver Spike
The main advantage of trading using opposite Collegium Pharmaceutical and Silver Spike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical position performs unexpectedly, Silver Spike 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 Silver Spike will offset losses from the drop in Silver Spike's long position.| Collegium Pharmaceutical vs. Catalent | Collegium Pharmaceutical vs. Amphastar P | Collegium Pharmaceutical vs. ANI Pharmaceuticals | Collegium Pharmaceutical vs. Alkermes Plc |
| Silver Spike vs. Entourage Health Corp | Silver Spike vs. Avicanna | Silver Spike vs. Benchmark Botanics | Silver Spike vs. Speakeasy Cannabis Club |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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