Correlation Between Haleon Plc and Slang Worldwide
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Slang Worldwide 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 Slang Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Slang Worldwide, you can compare the effects of market volatilities on Haleon Plc and Slang Worldwide 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 Slang Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Slang Worldwide.
Diversification Opportunities for Haleon Plc and Slang Worldwide
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haleon and Slang is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Slang Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slang Worldwide 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 Slang Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slang Worldwide has no effect on the direction of Haleon Plc i.e., Haleon Plc and Slang Worldwide go up and down completely randomly.
Pair Corralation between Haleon Plc and Slang Worldwide
Considering the 90-day investment horizon Haleon plc is expected to under-perform the Slang Worldwide. But the stock apears to be less risky and, when comparing its historical volatility, Haleon plc is 57.86 times less risky than Slang Worldwide. The stock trades about -0.19 of its potential returns per unit of risk. The Slang Worldwide is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.50 in Slang Worldwide on August 27, 2024 and sell it today you would lose (0.29) from holding Slang Worldwide or give up 58.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. Slang Worldwide
Performance |
| Timeline |
| Haleon plc |
| Slang Worldwide |
Haleon Plc and Slang Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Slang Worldwide
The main advantage of trading using opposite Haleon Plc and Slang Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Slang Worldwide 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 Slang Worldwide will offset losses from the drop in Slang Worldwide'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 |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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