Correlation Between Horizon Pharma and Santen Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Horizon Pharma and Santen Pharmaceutical 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 Horizon Pharma and Santen Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Pharma PLC and Santen Pharmaceutical Co, you can compare the effects of market volatilities on Horizon Pharma and Santen Pharmaceutical 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 Horizon Pharma with a short position of Santen Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Pharma and Santen Pharmaceutical.
Diversification Opportunities for Horizon Pharma and Santen Pharmaceutical
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Horizon and Santen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Pharma PLC and Santen Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santen Pharmaceutical and Horizon Pharma 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 Horizon Pharma PLC are associated (or correlated) with Santen Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santen Pharmaceutical has no effect on the direction of Horizon Pharma i.e., Horizon Pharma and Santen Pharmaceutical go up and down completely randomly.
Pair Corralation between Horizon Pharma and Santen Pharmaceutical
If you would invest 10,040 in Horizon Pharma PLC on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Horizon Pharma PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Horizon Pharma PLC vs. Santen Pharmaceutical Co
Performance |
| Timeline |
| Horizon Pharma PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Santen Pharmaceutical |
Horizon Pharma and Santen Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Pharma and Santen Pharmaceutical
The main advantage of trading using opposite Horizon Pharma and Santen Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Pharma position performs unexpectedly, Santen Pharmaceutical 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 Santen Pharmaceutical will offset losses from the drop in Santen Pharmaceutical's long position.| Horizon Pharma vs. Bristol Myers Squibb | Horizon Pharma vs. AbbVie Inc | Horizon Pharma vs. Merck Company | Horizon Pharma vs. Gilead Sciences |
| Santen Pharmaceutical vs. Ono Pharmaceutical Co | Santen Pharmaceutical vs. GSK plc | Santen Pharmaceutical vs. Grifols SA ADR | Santen Pharmaceutical vs. Pfizer Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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