Correlation Between Amicus Therapeutics and Sanofi ADR
Can any of the company-specific risk be diversified away by investing in both Amicus Therapeutics and Sanofi ADR 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 Amicus Therapeutics and Sanofi ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amicus Therapeutics and Sanofi ADR, you can compare the effects of market volatilities on Amicus Therapeutics and Sanofi ADR 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 Amicus Therapeutics with a short position of Sanofi ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amicus Therapeutics and Sanofi ADR.
Diversification Opportunities for Amicus Therapeutics and Sanofi ADR
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amicus and Sanofi is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amicus Therapeutics and Sanofi ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi ADR and Amicus Therapeutics 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 Amicus Therapeutics are associated (or correlated) with Sanofi ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi ADR has no effect on the direction of Amicus Therapeutics i.e., Amicus Therapeutics and Sanofi ADR go up and down completely randomly.
Pair Corralation between Amicus Therapeutics and Sanofi ADR
Given the investment horizon of 90 days Amicus Therapeutics is expected to generate 2.24 times more return on investment than Sanofi ADR. However, Amicus Therapeutics is 2.24 times more volatile than Sanofi ADR. It trades about -0.05 of its potential returns per unit of risk. Sanofi ADR is currently generating about -0.23 per unit of risk. If you would invest 1,128 in Amicus Therapeutics on September 12, 2024 and sell it today you would lose (112.00) from holding Amicus Therapeutics or give up 9.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amicus Therapeutics vs. Sanofi ADR
Performance |
| Timeline |
| Amicus Therapeutics |
| Sanofi ADR |
Amicus Therapeutics and Sanofi ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amicus Therapeutics and Sanofi ADR
The main advantage of trading using opposite Amicus Therapeutics and Sanofi ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amicus Therapeutics position performs unexpectedly, Sanofi ADR 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 Sanofi ADR will offset losses from the drop in Sanofi ADR's long position.| Amicus Therapeutics vs. Incyte | Amicus Therapeutics vs. Denali Therapeutics | Amicus Therapeutics vs. argenx NV ADR | Amicus Therapeutics vs. Harmony Biosciences Holdings |
| Sanofi ADR vs. Emergent Biosolutions | Sanofi ADR vs. Bausch Health Companies | Sanofi ADR vs. Neurocrine Biosciences | Sanofi ADR vs. Teva Pharma Industries |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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