Correlation Between Harmony Biosciences and Rezolute
Can any of the company-specific risk be diversified away by investing in both Harmony Biosciences and Rezolute 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 Rezolute 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 Rezolute, you can compare the effects of market volatilities on Harmony Biosciences and Rezolute 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 Rezolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Biosciences and Rezolute.
Diversification Opportunities for Harmony Biosciences and Rezolute
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Rezolute is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Biosciences Holdings and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute 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 Rezolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rezolute has no effect on the direction of Harmony Biosciences i.e., Harmony Biosciences and Rezolute go up and down completely randomly.
Pair Corralation between Harmony Biosciences and Rezolute
Given the investment horizon of 90 days Harmony Biosciences Holdings is expected to generate 1.71 times more return on investment than Rezolute. However, Harmony Biosciences is 1.71 times more volatile than Rezolute. It trades about 0.01 of its potential returns per unit of risk. Rezolute is currently generating about -0.19 per unit of risk. If you would invest 3,575 in Harmony Biosciences Holdings on August 28, 2024 and sell it today you would lose (104.00) from holding Harmony Biosciences Holdings or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Biosciences Holdings vs. Rezolute
Performance |
| Timeline |
| Harmony Biosciences |
| Rezolute |
Harmony Biosciences and Rezolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Biosciences and Rezolute
The main advantage of trading using opposite Harmony Biosciences and Rezolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Biosciences position performs unexpectedly, Rezolute 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 Rezolute will offset losses from the drop in Rezolute's long position.| Harmony Biosciences vs. Keros Therapeutics | Harmony Biosciences vs. Janux Therapeutics | Harmony Biosciences vs. Fennec Pharmaceuticals | Harmony Biosciences vs. Edgewise Therapeutics |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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