Correlation Between Haleon Plc and Rafarma Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Rafarma 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 Rafarma 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 Rafarma Pharmaceuticals, you can compare the effects of market volatilities on Haleon Plc and Rafarma 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 Rafarma Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Rafarma Pharmaceuticals.
Diversification Opportunities for Haleon Plc and Rafarma Pharmaceuticals
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Haleon and Rafarma is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Rafarma Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rafarma Pharmaceuticals 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 Rafarma Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rafarma Pharmaceuticals has no effect on the direction of Haleon Plc i.e., Haleon Plc and Rafarma Pharmaceuticals go up and down completely randomly.
Pair Corralation between Haleon Plc and Rafarma Pharmaceuticals
Considering the 90-day investment horizon Haleon plc is expected to under-perform the Rafarma Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Haleon plc is 15.78 times less risky than Rafarma Pharmaceuticals. The stock trades about -0.08 of its potential returns per unit of risk. The Rafarma Pharmaceuticals is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5.50 in Rafarma Pharmaceuticals on September 2, 2024 and sell it today you would earn a total of 3.20 from holding Rafarma Pharmaceuticals or generate 58.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. Rafarma Pharmaceuticals
Performance |
| Timeline |
| Haleon plc |
| Rafarma Pharmaceuticals |
Haleon Plc and Rafarma Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Rafarma Pharmaceuticals
The main advantage of trading using opposite Haleon Plc and Rafarma Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Rafarma 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 Rafarma Pharmaceuticals will offset losses from the drop in Rafarma Pharmaceuticals' long position.| Haleon Plc vs. Tff Pharmaceuticals | Haleon Plc vs. Eliem Therapeutics | Haleon Plc vs. Inhibrx | Haleon Plc vs. Enliven Therapeutics |
| Rafarma Pharmaceuticals vs. Holloman Energy Corp | Rafarma Pharmaceuticals vs. cbdMD Inc | Rafarma Pharmaceuticals vs. Evolus Inc | Rafarma Pharmaceuticals 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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