Correlation Between Incannex Healthcare and Collegium Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Incannex Healthcare and Collegium 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 Incannex Healthcare and Collegium Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incannex Healthcare Ltd and Collegium Pharmaceutical, you can compare the effects of market volatilities on Incannex Healthcare and Collegium 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 Incannex Healthcare with a short position of Collegium Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incannex Healthcare and Collegium Pharmaceutical.
Diversification Opportunities for Incannex Healthcare and Collegium Pharmaceutical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Incannex and Collegium is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Incannex Healthcare Ltd and Collegium Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegium Pharmaceutical and Incannex Healthcare 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 Incannex Healthcare Ltd are associated (or correlated) with Collegium Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegium Pharmaceutical has no effect on the direction of Incannex Healthcare i.e., Incannex Healthcare and Collegium Pharmaceutical go up and down completely randomly.
Pair Corralation between Incannex Healthcare and Collegium Pharmaceutical
Given the investment horizon of 90 days Incannex Healthcare is expected to generate 89.23 times less return on investment than Collegium Pharmaceutical. In addition to that, Incannex Healthcare is 1.5 times more volatile than Collegium Pharmaceutical. It trades about 0.0 of its total potential returns per unit of risk. Collegium Pharmaceutical is currently generating about 0.14 per unit of volatility. If you would invest 2,949 in Collegium Pharmaceutical on October 26, 2024 and sell it today you would earn a total of 282.00 from holding Collegium Pharmaceutical or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incannex Healthcare Ltd vs. Collegium Pharmaceutical
Performance |
| Timeline |
| Incannex Healthcare |
| Collegium Pharmaceutical |
Incannex Healthcare and Collegium Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incannex Healthcare and Collegium Pharmaceutical
The main advantage of trading using opposite Incannex Healthcare and Collegium Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incannex Healthcare position performs unexpectedly, Collegium 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 Collegium Pharmaceutical will offset losses from the drop in Collegium Pharmaceutical's long position.| Incannex Healthcare vs. Delta 9 Cannabis | Incannex Healthcare vs. City View Green | Incannex Healthcare vs. Benchmark Botanics | Incannex Healthcare vs. Speakeasy Cannabis Club |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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