Correlation Between Haleon Plc and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Abbott Laboratories 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 Haleon Plc and Abbott Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Abbott Laboratories, you can compare the effects of market volatilities on Haleon Plc and Abbott Laboratories 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 Haleon Plc with a short position of Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Abbott Laboratories.
Diversification Opportunities for Haleon Plc and Abbott Laboratories
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haleon and Abbott is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories and Haleon Plc 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 Haleon plc are associated (or correlated) with Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of Haleon Plc i.e., Haleon Plc and Abbott Laboratories go up and down completely randomly.
Pair Corralation between Haleon Plc and Abbott Laboratories
Considering the 90-day investment horizon Haleon Plc is expected to generate 1.37 times less return on investment than Abbott Laboratories. In addition to that, Haleon Plc is 1.09 times more volatile than Abbott Laboratories. It trades about 0.02 of its total potential returns per unit of risk. Abbott Laboratories is currently generating about 0.03 per unit of volatility. If you would invest 10,657 in Abbott Laboratories on January 11, 2025 and sell it today you would earn a total of 1,793 from holding Abbott Laboratories or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. Abbott Laboratories
Performance |
| Timeline |
| Haleon plc |
| Abbott Laboratories |
Haleon Plc and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Abbott Laboratories
The main advantage of trading using opposite Haleon Plc and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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