Correlation Between Haleon Plc and Hikma Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Hikma 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 Haleon Plc and Hikma Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Hikma Pharmaceuticals PLC, you can compare the effects of market volatilities on Haleon Plc and Hikma 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 Haleon Plc with a short position of Hikma Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Hikma Pharmaceuticals.
Diversification Opportunities for Haleon Plc and Hikma Pharmaceuticals
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haleon and Hikma is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Hikma Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hikma Pharmaceuticals PLC 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 Hikma Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hikma Pharmaceuticals PLC has no effect on the direction of Haleon Plc i.e., Haleon Plc and Hikma Pharmaceuticals go up and down completely randomly.
Pair Corralation between Haleon Plc and Hikma Pharmaceuticals
Considering the 90-day investment horizon Haleon plc is expected to generate 0.4 times more return on investment than Hikma Pharmaceuticals. However, Haleon plc is 2.51 times less risky than Hikma Pharmaceuticals. It trades about -0.01 of its potential returns per unit of risk. Hikma Pharmaceuticals PLC is currently generating about -0.03 per unit of risk. If you would invest 969.00 in Haleon plc on September 1, 2024 and sell it today you would lose (3.00) from holding Haleon plc or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. Hikma Pharmaceuticals PLC
Performance |
| Timeline |
| Haleon plc |
| Hikma Pharmaceuticals PLC |
Haleon Plc and Hikma Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Hikma Pharmaceuticals
The main advantage of trading using opposite Haleon Plc and Hikma Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Hikma 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 Hikma Pharmaceuticals will offset losses from the drop in Hikma Pharmaceuticals' long position.| Haleon Plc vs. Tff Pharmaceuticals | Haleon Plc vs. Eliem Therapeutics | Haleon Plc vs. Inhibrx | Haleon Plc vs. Enliven Therapeutics |
| Hikma Pharmaceuticals vs. LithiumBank Resources Corp | Hikma Pharmaceuticals vs. Univest Pennsylvania | Hikma Pharmaceuticals vs. Commonwealth Bank of | Hikma Pharmaceuticals vs. Titan Machinery |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |