Correlation Between Collegium Pharmaceutical and Viatris
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical and Viatris 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 Viatris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and Viatris, you can compare the effects of market volatilities on Collegium Pharmaceutical and Viatris 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 Viatris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and Viatris.
Diversification Opportunities for Collegium Pharmaceutical and Viatris
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Collegium and Viatris is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Viatris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viatris 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 Viatris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viatris has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Viatris go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and Viatris
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to generate 1.38 times more return on investment than Viatris. However, Collegium Pharmaceutical is 1.38 times more volatile than Viatris. It trades about 0.04 of its potential returns per unit of risk. Viatris is currently generating about 0.04 per unit of risk. If you would invest 2,273 in Collegium Pharmaceutical on August 24, 2024 and sell it today you would earn a total of 768.00 from holding Collegium Pharmaceutical or generate 33.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. Viatris
Performance |
| Timeline |
| Collegium Pharmaceutical |
| Viatris |
Collegium Pharmaceutical and Viatris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and Viatris
The main advantage of trading using opposite Collegium Pharmaceutical and Viatris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical position performs unexpectedly, Viatris 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 Viatris will offset losses from the drop in Viatris' long position.| Collegium Pharmaceutical vs. Phibro Animal Health | Collegium Pharmaceutical vs. ANI Pharmaceuticals | Collegium Pharmaceutical vs. Procaps Group SA | Collegium Pharmaceutical vs. Amphastar P |
| Viatris vs. Catalent | Viatris vs. Bausch Health Companies | Viatris vs. Tilray Inc | Viatris vs. Takeda Pharmaceutical Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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