Correlation Between Grifols SA and Aurinia Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Grifols SA and Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals, you can compare the effects of market volatilities on Grifols SA and Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grifols SA and Aurinia Pharmaceuticals.
Diversification Opportunities for Grifols SA and Aurinia Pharmaceuticals
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grifols and Aurinia is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Grifols SA ADR and Aurinia Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurinia Pharmaceuticals has no effect on the direction of Grifols SA i.e., Grifols SA and Aurinia Pharmaceuticals go up and down completely randomly.
Pair Corralation between Grifols SA and Aurinia Pharmaceuticals
Given the investment horizon of 90 days Grifols SA ADR is expected to generate 0.98 times more return on investment than Aurinia Pharmaceuticals. However, Grifols SA ADR is 1.03 times less risky than Aurinia Pharmaceuticals. It trades about -0.18 of its potential returns per unit of risk. Aurinia Pharmaceuticals is currently generating about -0.19 per unit of risk. If you would invest 754.00 in Grifols SA ADR on November 3, 2024 and sell it today you would lose (65.00) from holding Grifols SA ADR or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Grifols SA ADR vs. Aurinia Pharmaceuticals
Performance |
| Timeline |
| Grifols SA ADR |
| Aurinia Pharmaceuticals |
Grifols SA and Aurinia Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grifols SA and Aurinia Pharmaceuticals
The main advantage of trading using opposite Grifols SA and Aurinia Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grifols SA position performs unexpectedly, Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals will offset losses from the drop in Aurinia Pharmaceuticals' 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 |
| Aurinia Pharmaceuticals vs. Viking Therapeutics | Aurinia Pharmaceuticals vs. Axsome Therapeutics | Aurinia Pharmaceuticals vs. Madrigal Pharmaceuticals | Aurinia Pharmaceuticals vs. Seres Therapeutics |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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