Correlation Between ASPEN PHARUNADR and HANSOH PHARMAC
Can any of the company-specific risk be diversified away by investing in both ASPEN PHARUNADR and HANSOH PHARMAC 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 ASPEN PHARUNADR and HANSOH PHARMAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASPEN PHARUNADR 1 and HANSOH PHARMAC HD 00001, you can compare the effects of market volatilities on ASPEN PHARUNADR and HANSOH PHARMAC 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 ASPEN PHARUNADR with a short position of HANSOH PHARMAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN PHARUNADR and HANSOH PHARMAC.
Diversification Opportunities for ASPEN PHARUNADR and HANSOH PHARMAC
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASPEN and HANSOH is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN PHARUNADR 1 and HANSOH PHARMAC HD 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANSOH PHARMAC HD and ASPEN PHARUNADR 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 ASPEN PHARUNADR 1 are associated (or correlated) with HANSOH PHARMAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANSOH PHARMAC HD has no effect on the direction of ASPEN PHARUNADR i.e., ASPEN PHARUNADR and HANSOH PHARMAC go up and down completely randomly.
Pair Corralation between ASPEN PHARUNADR and HANSOH PHARMAC
Assuming the 90 days trading horizon ASPEN PHARUNADR 1 is expected to generate 0.5 times more return on investment than HANSOH PHARMAC. However, ASPEN PHARUNADR 1 is 2.01 times less risky than HANSOH PHARMAC. It trades about -0.13 of its potential returns per unit of risk. HANSOH PHARMAC HD 00001 is currently generating about -0.08 per unit of risk. If you would invest 890.00 in ASPEN PHARUNADR 1 on October 15, 2024 and sell it today you would lose (40.00) from holding ASPEN PHARUNADR 1 or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASPEN PHARUNADR 1 vs. HANSOH PHARMAC HD 00001
Performance |
| Timeline |
| ASPEN PHARUNADR 1 |
| HANSOH PHARMAC HD |
ASPEN PHARUNADR and HANSOH PHARMAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASPEN PHARUNADR and HANSOH PHARMAC
The main advantage of trading using opposite ASPEN PHARUNADR and HANSOH PHARMAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN PHARUNADR position performs unexpectedly, HANSOH PHARMAC 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 HANSOH PHARMAC will offset losses from the drop in HANSOH PHARMAC's long position.| ASPEN PHARUNADR vs. Superior Plus Corp | ASPEN PHARUNADR vs. NMI Holdings | ASPEN PHARUNADR vs. SIVERS SEMICONDUCTORS AB | ASPEN PHARUNADR vs. Talanx AG |
| HANSOH PHARMAC vs. Sanyo Chemical Industries | HANSOH PHARMAC vs. Siamgas And Petrochemicals | HANSOH PHARMAC vs. China BlueChemical | HANSOH PHARMAC vs. KINGBOARD CHEMICAL |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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