Correlation Between Haleon Plc and Cansortium
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Cansortium 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 Cansortium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Cansortium, you can compare the effects of market volatilities on Haleon Plc and Cansortium 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 Cansortium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Cansortium.
Diversification Opportunities for Haleon Plc and Cansortium
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haleon and Cansortium is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Cansortium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cansortium 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 Cansortium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cansortium has no effect on the direction of Haleon Plc i.e., Haleon Plc and Cansortium go up and down completely randomly.
Pair Corralation between Haleon Plc and Cansortium
Assuming the 90 days horizon Haleon plc is expected to generate 8.73 times more return on investment than Cansortium. However, Haleon Plc is 8.73 times more volatile than Cansortium. It trades about 0.06 of its potential returns per unit of risk. Cansortium is currently generating about 0.02 per unit of risk. If you would invest 363.00 in Haleon plc on August 29, 2024 and sell it today you would earn a total of 105.00 from holding Haleon plc or generate 28.93% 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. Cansortium
Performance |
| Timeline |
| Haleon plc |
| Cansortium |
Haleon Plc and Cansortium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Cansortium
The main advantage of trading using opposite Haleon Plc and Cansortium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Cansortium 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 Cansortium will offset losses from the drop in Cansortium's long position.| Haleon Plc vs. Rimrock Gold Corp | Haleon Plc vs. Link Reservations | Haleon Plc vs. Marijuana | Haleon Plc vs. Greater Cannabis |
| Cansortium vs. Green Cures Botanical | Cansortium vs. Cann American Corp | Cansortium vs. Rimrock Gold Corp | Cansortium vs. Galexxy Holdings |
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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