Correlation Between Haleon Plc and Innate Pharma
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Innate 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 Innate 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 Innate Pharma, you can compare the effects of market volatilities on Haleon Plc and Innate 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 Innate Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Innate Pharma.
Diversification Opportunities for Haleon Plc and Innate Pharma
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haleon and Innate is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Innate Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innate 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 Innate Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innate Pharma has no effect on the direction of Haleon Plc i.e., Haleon Plc and Innate Pharma go up and down completely randomly.
Pair Corralation between Haleon Plc and Innate Pharma
Considering the 90-day investment horizon Haleon plc is expected to generate 0.17 times more return on investment than Innate Pharma. However, Haleon plc is 5.85 times less risky than Innate Pharma. It trades about -0.17 of its potential returns per unit of risk. Innate Pharma is currently generating about -0.13 per unit of risk. If you would invest 1,040 in Haleon plc on September 3, 2024 and sell it today you would lose (74.00) from holding Haleon plc or give up 7.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. Innate Pharma
Performance |
| Timeline |
| Haleon plc |
| Innate Pharma |
Haleon Plc and Innate Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Innate Pharma
The main advantage of trading using opposite Haleon Plc and Innate Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Innate 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 Innate Pharma will offset losses from the drop in Innate 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 |
| Innate Pharma vs. Eliem Therapeutics | Innate Pharma vs. HCW Biologics | Innate Pharma vs. Inhibrx | Innate Pharma vs. Anebulo Pharmaceuticals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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