Correlation Between Otsuka Holdings and Astellas Pharma
Can any of the company-specific risk be diversified away by investing in both Otsuka Holdings and Astellas Pharma 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 Otsuka Holdings and Astellas Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otsuka Holdings Co and Astellas Pharma, you can compare the effects of market volatilities on Otsuka Holdings and Astellas Pharma 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 Otsuka Holdings with a short position of Astellas Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otsuka Holdings and Astellas Pharma.
Diversification Opportunities for Otsuka Holdings and Astellas Pharma
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Otsuka and Astellas is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Otsuka Holdings Co and Astellas Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astellas Pharma and Otsuka Holdings 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 Otsuka Holdings Co are associated (or correlated) with Astellas Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astellas Pharma has no effect on the direction of Otsuka Holdings i.e., Otsuka Holdings and Astellas Pharma go up and down completely randomly.
Pair Corralation between Otsuka Holdings and Astellas Pharma
Assuming the 90 days horizon Otsuka Holdings Co is expected to generate 0.43 times more return on investment than Astellas Pharma. However, Otsuka Holdings Co is 2.33 times less risky than Astellas Pharma. It trades about -0.1 of its potential returns per unit of risk. Astellas Pharma is currently generating about -0.15 per unit of risk. If you would invest 2,990 in Otsuka Holdings Co on August 27, 2024 and sell it today you would lose (107.00) from holding Otsuka Holdings Co or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Otsuka Holdings Co vs. Astellas Pharma
Performance |
| Timeline |
| Otsuka Holdings |
| Astellas Pharma |
Otsuka Holdings and Astellas Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Otsuka Holdings and Astellas Pharma
The main advantage of trading using opposite Otsuka Holdings and Astellas Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otsuka Holdings position performs unexpectedly, Astellas Pharma 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 Astellas Pharma will offset losses from the drop in Astellas Pharma's long position.| Otsuka Holdings vs. Pfizer Inc | Otsuka Holdings vs. Astellas Pharma | Otsuka Holdings vs. Bristol Myers Squibb | Otsuka Holdings vs. Bayer AG |
| Astellas Pharma vs. Sanofi ADR | Astellas Pharma vs. Bristol Myers Squibb | Astellas Pharma vs. AstraZeneca PLC ADR | Astellas Pharma vs. Gilead Sciences |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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