Correlation Between Harmony Biosciences and Amicus Therapeutics
Can any of the company-specific risk be diversified away by investing in both Harmony Biosciences and Amicus Therapeutics 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 Harmony Biosciences and Amicus Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harmony Biosciences Holdings and Amicus Therapeutics, you can compare the effects of market volatilities on Harmony Biosciences and Amicus Therapeutics 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 Harmony Biosciences with a short position of Amicus Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Biosciences and Amicus Therapeutics.
Diversification Opportunities for Harmony Biosciences and Amicus Therapeutics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harmony and Amicus is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Biosciences Holdings and Amicus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amicus Therapeutics and Harmony Biosciences 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 Harmony Biosciences Holdings are associated (or correlated) with Amicus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amicus Therapeutics has no effect on the direction of Harmony Biosciences i.e., Harmony Biosciences and Amicus Therapeutics go up and down completely randomly.
Pair Corralation between Harmony Biosciences and Amicus Therapeutics
Given the investment horizon of 90 days Harmony Biosciences Holdings is expected to generate 1.06 times more return on investment than Amicus Therapeutics. However, Harmony Biosciences is 1.06 times more volatile than Amicus Therapeutics. It trades about 0.19 of its potential returns per unit of risk. Amicus Therapeutics is currently generating about -0.32 per unit of risk. If you would invest 3,213 in Harmony Biosciences Holdings on September 1, 2024 and sell it today you would earn a total of 254.00 from holding Harmony Biosciences Holdings or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Biosciences Holdings vs. Amicus Therapeutics
Performance |
| Timeline |
| Harmony Biosciences |
| Amicus Therapeutics |
Harmony Biosciences and Amicus Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Biosciences and Amicus Therapeutics
The main advantage of trading using opposite Harmony Biosciences and Amicus Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Biosciences position performs unexpectedly, Amicus Therapeutics 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 Amicus Therapeutics will offset losses from the drop in Amicus Therapeutics' long position.| Harmony Biosciences vs. Keros Therapeutics | Harmony Biosciences vs. Janux Therapeutics | Harmony Biosciences vs. Fennec Pharmaceuticals | Harmony Biosciences vs. Edgewise Therapeutics |
| Amicus Therapeutics vs. Incyte | Amicus Therapeutics vs. Denali Therapeutics | Amicus Therapeutics vs. argenx NV ADR | Amicus Therapeutics vs. Harmony Biosciences 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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