Correlation Between Hypera SA and Cumberland Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Hypera SA and Cumberland Pharmaceuticals 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 Hypera SA and Cumberland Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hypera SA and Cumberland Pharmaceuticals, you can compare the effects of market volatilities on Hypera SA and Cumberland Pharmaceuticals 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 Hypera SA with a short position of Cumberland Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hypera SA and Cumberland Pharmaceuticals.
Diversification Opportunities for Hypera SA and Cumberland Pharmaceuticals
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hypera and Cumberland is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hypera SA and Cumberland Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumberland Pharmaceuticals and Hypera SA 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 Hypera SA are associated (or correlated) with Cumberland Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumberland Pharmaceuticals has no effect on the direction of Hypera SA i.e., Hypera SA and Cumberland Pharmaceuticals go up and down completely randomly.
Pair Corralation between Hypera SA and Cumberland Pharmaceuticals
Assuming the 90 days horizon Hypera SA is expected to under-perform the Cumberland Pharmaceuticals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hypera SA is 1.63 times less risky than Cumberland Pharmaceuticals. The pink sheet trades about -0.27 of its potential returns per unit of risk. The Cumberland Pharmaceuticals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Cumberland Pharmaceuticals on August 29, 2024 and sell it today you would earn a total of 12.00 from holding Cumberland Pharmaceuticals or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hypera SA vs. Cumberland Pharmaceuticals
Performance |
| Timeline |
| Hypera SA |
| Cumberland Pharmaceuticals |
Hypera SA and Cumberland Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hypera SA and Cumberland Pharmaceuticals
The main advantage of trading using opposite Hypera SA and Cumberland Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hypera SA position performs unexpectedly, Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals will offset losses from the drop in Cumberland Pharmaceuticals' long position.| Hypera SA vs. Green Cures Botanical | Hypera SA vs. Cann American Corp | Hypera SA vs. Rimrock Gold Corp | Hypera SA vs. Galexxy Holdings |
| Cumberland Pharmaceuticals vs. Phibro Animal Health | Cumberland Pharmaceuticals vs. Procaps Group SA | Cumberland Pharmaceuticals vs. Amphastar P | Cumberland Pharmaceuticals vs. Alkermes Plc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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