Correlation Between Haleon Plc and Orexo AB
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Orexo AB 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 Orexo AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Orexo AB, you can compare the effects of market volatilities on Haleon Plc and Orexo AB 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 Orexo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Orexo AB.
Diversification Opportunities for Haleon Plc and Orexo AB
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haleon and Orexo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Orexo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orexo AB 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 Orexo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orexo AB has no effect on the direction of Haleon Plc i.e., Haleon Plc and Orexo AB go up and down completely randomly.
Pair Corralation between Haleon Plc and Orexo AB
Considering the 90-day investment horizon Haleon plc is expected to generate 0.4 times more return on investment than Orexo AB. However, Haleon plc is 2.48 times less risky than Orexo AB. It trades about 0.11 of its potential returns per unit of risk. Orexo AB is currently generating about -0.09 per unit of risk. If you would invest 835.00 in Haleon plc on August 24, 2024 and sell it today you would earn a total of 120.00 from holding Haleon plc or generate 14.37% 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. Orexo AB
Performance |
| Timeline |
| Haleon plc |
| Orexo AB |
Haleon Plc and Orexo AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Orexo AB
The main advantage of trading using opposite Haleon Plc and Orexo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Orexo AB 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 Orexo AB will offset losses from the drop in Orexo AB'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 |
| Orexo AB vs. Holloman Energy Corp | Orexo AB vs. cbdMD Inc | Orexo AB vs. Evolus Inc | Orexo AB vs. CV Sciences |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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