Correlation Between Emergent Biosolutions and Haleon Plc
Can any of the company-specific risk be diversified away by investing in both Emergent Biosolutions and Haleon Plc 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 Haleon Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emergent Biosolutions and Haleon plc, you can compare the effects of market volatilities on Emergent Biosolutions and Haleon Plc 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 Haleon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emergent Biosolutions and Haleon Plc.
Diversification Opportunities for Emergent Biosolutions and Haleon Plc
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emergent and Haleon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Biosolutions and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc 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 Haleon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon plc has no effect on the direction of Emergent Biosolutions i.e., Emergent Biosolutions and Haleon Plc go up and down completely randomly.
Pair Corralation between Emergent Biosolutions and Haleon Plc
Considering the 90-day investment horizon Emergent Biosolutions is expected to generate 6.66 times more return on investment than Haleon Plc. However, Emergent Biosolutions is 6.66 times more volatile than Haleon plc. It trades about 0.11 of its potential returns per unit of risk. Haleon plc is currently generating about -0.07 per unit of risk. If you would invest 739.00 in Emergent Biosolutions on August 31, 2024 and sell it today you would earn a total of 272.00 from holding Emergent Biosolutions or generate 36.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emergent Biosolutions vs. Haleon plc
Performance |
| Timeline |
| Emergent Biosolutions |
| Haleon plc |
Emergent Biosolutions and Haleon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emergent Biosolutions and Haleon Plc
The main advantage of trading using opposite Emergent Biosolutions and Haleon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emergent Biosolutions position performs unexpectedly, Haleon Plc 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 Haleon Plc will offset losses from the drop in Haleon Plc's long position.| Emergent Biosolutions vs. Bausch Health Companies | Emergent Biosolutions vs. Neurocrine Biosciences | Emergent Biosolutions vs. Teva Pharma Industries | Emergent Biosolutions vs. Haleon plc |
| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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