Correlation Between CSL and CITIUS PHARMAC
Can any of the company-specific risk be diversified away by investing in both CSL and CITIUS PHARMAC 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 CSL and CITIUS PHARMAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL Limited and CITIUS PHARMAC DL, you can compare the effects of market volatilities on CSL and CITIUS PHARMAC 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 CSL with a short position of CITIUS PHARMAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and CITIUS PHARMAC.
Diversification Opportunities for CSL and CITIUS PHARMAC
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSL and CITIUS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and CITIUS PHARMAC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIUS PHARMAC DL and CSL 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 CSL Limited are associated (or correlated) with CITIUS PHARMAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIUS PHARMAC DL has no effect on the direction of CSL i.e., CSL and CITIUS PHARMAC go up and down completely randomly.
Pair Corralation between CSL and CITIUS PHARMAC
Assuming the 90 days horizon CSL Limited is expected to generate 0.17 times more return on investment than CITIUS PHARMAC. However, CSL Limited is 5.91 times less risky than CITIUS PHARMAC. It trades about -0.09 of its potential returns per unit of risk. CITIUS PHARMAC DL is currently generating about -0.17 per unit of risk. If you would invest 18,178 in CSL Limited on November 2, 2024 and sell it today you would lose (1,778) from holding CSL Limited or give up 9.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.09% |
| Values | Daily Returns |
CSL Limited vs. CITIUS PHARMAC DL
Performance |
| Timeline |
| CSL Limited |
| CITIUS PHARMAC DL |
CSL and CITIUS PHARMAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and CITIUS PHARMAC
The main advantage of trading using opposite CSL and CITIUS PHARMAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, CITIUS PHARMAC 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 CITIUS PHARMAC will offset losses from the drop in CITIUS PHARMAC's long position.| CSL vs. KIMBALL ELECTRONICS | CSL vs. Richardson Electronics | CSL vs. Nanjing Panda Electronics | CSL vs. CarsalesCom |
| CITIUS PHARMAC vs. Novo Nordisk AS | CITIUS PHARMAC vs. CSL LTD SPONADR | CITIUS PHARMAC vs. CSL Limited | CITIUS PHARMAC vs. Mercedes Benz Group AG |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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