Correlation Between Haleon Plc and Elite Pharma
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Elite 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 Haleon Plc and Elite Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Elite Pharma, you can compare the effects of market volatilities on Haleon Plc and Elite 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 Haleon Plc with a short position of Elite Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Elite Pharma.
Diversification Opportunities for Haleon Plc and Elite Pharma
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haleon and Elite is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Elite Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Pharma 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 Elite Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Pharma has no effect on the direction of Haleon Plc i.e., Haleon Plc and Elite Pharma go up and down completely randomly.
Pair Corralation between Haleon Plc and Elite Pharma
Considering the 90-day investment horizon Haleon Plc is expected to generate 8.55 times less return on investment than Elite Pharma. But when comparing it to its historical volatility, Haleon plc is 7.42 times less risky than Elite Pharma. It trades about 0.05 of its potential returns per unit of risk. Elite Pharma is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Elite Pharma on August 28, 2024 and sell it today you would earn a total of 0.73 from holding Elite Pharma or generate 24.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
Haleon plc vs. Elite Pharma
Performance |
| Timeline |
| Haleon plc |
| Elite Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Haleon Plc and Elite Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Elite Pharma
The main advantage of trading using opposite Haleon Plc and Elite Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Elite 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 Elite Pharma will offset losses from the drop in Elite Pharma's 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 |
| Elite Pharma vs. Amarantus Bioscience Holdings | Elite Pharma vs. Intelgenx Technologs | Elite Pharma vs. Cytosorbents Crp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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