Correlation Between Eat Beyond and Santen Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Eat Beyond and Santen Pharmaceutical 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 Eat Beyond and Santen Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eat Beyond Global and Santen Pharmaceutical Co, you can compare the effects of market volatilities on Eat Beyond and Santen Pharmaceutical 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 Eat Beyond with a short position of Santen Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eat Beyond and Santen Pharmaceutical.
Diversification Opportunities for Eat Beyond and Santen Pharmaceutical
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eat and Santen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eat Beyond Global and Santen Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santen Pharmaceutical and Eat Beyond 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 Eat Beyond Global are associated (or correlated) with Santen Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santen Pharmaceutical has no effect on the direction of Eat Beyond i.e., Eat Beyond and Santen Pharmaceutical go up and down completely randomly.
Pair Corralation between Eat Beyond and Santen Pharmaceutical
Assuming the 90 days horizon Eat Beyond Global is expected to generate 21.09 times more return on investment than Santen Pharmaceutical. However, Eat Beyond is 21.09 times more volatile than Santen Pharmaceutical Co. It trades about 0.21 of its potential returns per unit of risk. Santen Pharmaceutical Co is currently generating about -0.31 per unit of risk. If you would invest 3.20 in Eat Beyond Global on September 1, 2024 and sell it today you would earn a total of 3.40 from holding Eat Beyond Global or generate 106.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eat Beyond Global vs. Santen Pharmaceutical Co
Performance |
| Timeline |
| Eat Beyond Global |
| Santen Pharmaceutical |
Eat Beyond and Santen Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eat Beyond and Santen Pharmaceutical
The main advantage of trading using opposite Eat Beyond and Santen Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eat Beyond position performs unexpectedly, Santen Pharmaceutical 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 Santen Pharmaceutical will offset losses from the drop in Santen Pharmaceutical's long position.| Eat Beyond vs. Elysee Development Corp | Eat Beyond vs. Azimut Holding SpA | Eat Beyond vs. Ameritrans Capital Corp | Eat Beyond vs. Aimia Inc |
| Santen Pharmaceutical vs. Ono Pharmaceutical Co | Santen Pharmaceutical vs. GSK plc | Santen Pharmaceutical vs. Grifols SA ADR | Santen Pharmaceutical vs. Pfizer 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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