Correlation Between Haleon Plc and Frequency Therapeutics
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Frequency Therapeutics 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 Frequency Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Frequency Therapeutics, you can compare the effects of market volatilities on Haleon Plc and Frequency Therapeutics 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 Frequency Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Frequency Therapeutics.
Diversification Opportunities for Haleon Plc and Frequency Therapeutics
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Haleon and Frequency is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Frequency Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Therapeutics 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 Frequency Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Therapeutics has no effect on the direction of Haleon Plc i.e., Haleon Plc and Frequency Therapeutics go up and down completely randomly.
Pair Corralation between Haleon Plc and Frequency Therapeutics
Considering the 90-day investment horizon Haleon plc is expected to generate 0.24 times more return on investment than Frequency Therapeutics. However, Haleon plc is 4.17 times less risky than Frequency Therapeutics. It trades about 0.28 of its potential returns per unit of risk. Frequency Therapeutics is currently generating about -0.31 per unit of risk. If you would invest 954.00 in Haleon plc on November 29, 2024 and sell it today you would earn a total of 66.00 from holding Haleon plc or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. Frequency Therapeutics
Performance |
| Timeline |
| Haleon plc |
| Frequency Therapeutics |
Haleon Plc and Frequency Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Frequency Therapeutics
The main advantage of trading using opposite Haleon Plc and Frequency Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Frequency Therapeutics 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 Frequency Therapeutics will offset losses from the drop in Frequency Therapeutics' 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 |
| Frequency Therapeutics vs. IPG Photonics | Frequency Therapeutics vs. Axcelis Technologies | Frequency Therapeutics vs. Amkor Technology | Frequency Therapeutics vs. Lithium Americas Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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