Correlation Between INC Research and Haleon Plc
Can any of the company-specific risk be diversified away by investing in both INC Research and Haleon Plc 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 INC Research and Haleon Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INC Research Holdings and Haleon plc, you can compare the effects of market volatilities on INC Research and Haleon Plc 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 INC Research with a short position of Haleon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of INC Research and Haleon Plc.
Diversification Opportunities for INC Research and Haleon Plc
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INC and Haleon is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding INC Research Holdings and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc and INC Research 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 INC Research Holdings are associated (or correlated) with Haleon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon plc has no effect on the direction of INC Research i.e., INC Research and Haleon Plc go up and down completely randomly.
Pair Corralation between INC Research and Haleon Plc
Given the investment horizon of 90 days INC Research Holdings is expected to under-perform the Haleon Plc. In addition to that, INC Research is 3.91 times more volatile than Haleon plc. It trades about 0.0 of its total potential returns per unit of risk. Haleon plc is currently generating about 0.05 per unit of volatility. If you would invest 806.00 in Haleon plc on August 31, 2024 and sell it today you would earn a total of 160.00 from holding Haleon plc or generate 19.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INC Research Holdings vs. Haleon plc
Performance |
| Timeline |
| INC Research Holdings |
| Haleon plc |
INC Research and Haleon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INC Research and Haleon Plc
The main advantage of trading using opposite INC Research and Haleon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INC Research position performs unexpectedly, Haleon Plc 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 Haleon Plc will offset losses from the drop in Haleon Plc's long position.The idea behind INC Research Holdings and Haleon plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |