Correlation Between Haleon Plc and Hypera SA
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Hypera SA 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 Hypera SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Hypera SA, you can compare the effects of market volatilities on Haleon Plc and Hypera SA 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 Hypera SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Hypera SA.
Diversification Opportunities for Haleon Plc and Hypera SA
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haleon and Hypera is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Hypera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypera SA 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 Hypera SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypera SA has no effect on the direction of Haleon Plc i.e., Haleon Plc and Hypera SA go up and down completely randomly.
Pair Corralation between Haleon Plc and Hypera SA
Considering the 90-day investment horizon Haleon plc is expected to generate 0.54 times more return on investment than Hypera SA. However, Haleon plc is 1.84 times less risky than Hypera SA. It trades about 0.05 of its potential returns per unit of risk. Hypera SA is currently generating about -0.06 per unit of risk. If you would invest 749.00 in Haleon plc on August 30, 2024 and sell it today you would earn a total of 223.00 from holding Haleon plc or generate 29.77% 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. Hypera SA
Performance |
| Timeline |
| Haleon plc |
| Hypera SA |
Haleon Plc and Hypera SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Hypera SA
The main advantage of trading using opposite Haleon Plc and Hypera SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Hypera SA 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 Hypera SA will offset losses from the drop in Hypera SA'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 |
| Hypera SA vs. Green Cures Botanical | Hypera SA vs. Cann American Corp | Hypera SA vs. Rimrock Gold Corp | Hypera SA vs. Galexxy Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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