Correlation Between Grifols SA and Astellas Pharma
Can any of the company-specific risk be diversified away by investing in both Grifols SA and Astellas Pharma 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 Grifols SA and Astellas Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grifols SA ADR and Astellas Pharma, you can compare the effects of market volatilities on Grifols SA and Astellas Pharma 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 Grifols SA with a short position of Astellas Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grifols SA and Astellas Pharma.
Diversification Opportunities for Grifols SA and Astellas Pharma
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grifols and Astellas is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Grifols SA ADR and Astellas Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astellas Pharma and Grifols SA 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 Grifols SA ADR are associated (or correlated) with Astellas Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astellas Pharma has no effect on the direction of Grifols SA i.e., Grifols SA and Astellas Pharma go up and down completely randomly.
Pair Corralation between Grifols SA and Astellas Pharma
Given the investment horizon of 90 days Grifols SA ADR is expected to generate 1.04 times more return on investment than Astellas Pharma. However, Grifols SA is 1.04 times more volatile than Astellas Pharma. It trades about 0.05 of its potential returns per unit of risk. Astellas Pharma is currently generating about 0.02 per unit of risk. If you would invest 736.00 in Grifols SA ADR on August 24, 2024 and sell it today you would earn a total of 118.00 from holding Grifols SA ADR or generate 16.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Grifols SA ADR vs. Astellas Pharma
Performance |
| Timeline |
| Grifols SA ADR |
| Astellas Pharma |
Grifols SA and Astellas Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grifols SA and Astellas Pharma
The main advantage of trading using opposite Grifols SA and Astellas Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grifols SA position performs unexpectedly, Astellas Pharma 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 Astellas Pharma will offset losses from the drop in Astellas Pharma's long position.| Grifols SA vs. Novartis AG ADR | Grifols SA vs. AstraZeneca PLC ADR | Grifols SA vs. GlaxoSmithKline PLC ADR | Grifols SA vs. Roche Holding Ltd |
| Astellas Pharma vs. Ono Pharmaceutical Co | Astellas Pharma vs. GSK plc | Astellas Pharma vs. Grifols SA ADR | Astellas Pharma 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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