Correlation Between Emergent Biosolutions and Collegium Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Emergent Biosolutions and Collegium 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 Emergent Biosolutions and Collegium Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emergent Biosolutions and Collegium Pharmaceutical, you can compare the effects of market volatilities on Emergent Biosolutions and Collegium 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 Emergent Biosolutions with a short position of Collegium Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emergent Biosolutions and Collegium Pharmaceutical.
Diversification Opportunities for Emergent Biosolutions and Collegium Pharmaceutical
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emergent and Collegium is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Biosolutions and Collegium Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegium Pharmaceutical and Emergent Biosolutions 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 Emergent Biosolutions are associated (or correlated) with Collegium Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegium Pharmaceutical has no effect on the direction of Emergent Biosolutions i.e., Emergent Biosolutions and Collegium Pharmaceutical go up and down completely randomly.
Pair Corralation between Emergent Biosolutions and Collegium Pharmaceutical
Considering the 90-day investment horizon Emergent Biosolutions is expected to generate 3.23 times more return on investment than Collegium Pharmaceutical. However, Emergent Biosolutions is 3.23 times more volatile than Collegium Pharmaceutical. It trades about 0.05 of its potential returns per unit of risk. Collegium Pharmaceutical is currently generating about -0.24 per unit of risk. If you would invest 967.00 in Emergent Biosolutions on August 27, 2024 and sell it today you would earn a total of 18.00 from holding Emergent Biosolutions or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emergent Biosolutions vs. Collegium Pharmaceutical
Performance |
| Timeline |
| Emergent Biosolutions |
| Collegium Pharmaceutical |
Emergent Biosolutions and Collegium Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emergent Biosolutions and Collegium Pharmaceutical
The main advantage of trading using opposite Emergent Biosolutions and Collegium Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emergent Biosolutions position performs unexpectedly, Collegium 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 Collegium Pharmaceutical will offset losses from the drop in Collegium Pharmaceutical's long position.| Emergent Biosolutions vs. Zoetis Inc | Emergent Biosolutions vs. Bausch Health Companies | Emergent Biosolutions vs. Neurocrine Biosciences | Emergent Biosolutions vs. Akanda Corp |
| Collegium Pharmaceutical vs. Phibro Animal Health | Collegium Pharmaceutical vs. ANI Pharmaceuticals | Collegium Pharmaceutical vs. Procaps Group SA | Collegium Pharmaceutical vs. Amphastar P |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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