Correlation Between Haleon Plc and Real Brands
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Real Brands 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 Real Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Real Brands, you can compare the effects of market volatilities on Haleon Plc and Real Brands 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 Real Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Real Brands.
Diversification Opportunities for Haleon Plc and Real Brands
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haleon and Real is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Real Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Brands 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 Real Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Brands has no effect on the direction of Haleon Plc i.e., Haleon Plc and Real Brands go up and down completely randomly.
Pair Corralation between Haleon Plc and Real Brands
Assuming the 90 days horizon Haleon plc is expected to generate 1.32 times more return on investment than Real Brands. However, Haleon Plc is 1.32 times more volatile than Real Brands. It trades about 0.06 of its potential returns per unit of risk. Real Brands is currently generating about 0.06 per unit of risk. If you would invest 339.00 in Haleon plc on August 25, 2024 and sell it today you would earn a total of 117.00 from holding Haleon plc or generate 34.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Haleon plc vs. Real Brands
Performance |
| Timeline |
| Haleon plc |
| Real Brands |
Haleon Plc and Real Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Real Brands
The main advantage of trading using opposite Haleon Plc and Real Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Real Brands 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 Real Brands will offset losses from the drop in Real Brands' long position.| Haleon Plc vs. Green Cures Botanical | Haleon Plc vs. Galexxy Holdings | Haleon Plc vs. Indoor Harvest Corp | Haleon Plc vs. Speakeasy Cannabis Club |
| Real Brands vs. American Premium Water | Real Brands vs. Puration | Real Brands vs. Kona Gold Solutions | Real Brands vs. Leafbuyer Technologies |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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