Correlation Between Prestige Brand and Haleon Plc
Can any of the company-specific risk be diversified away by investing in both Prestige Brand 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 Prestige Brand and Haleon Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prestige Brand Holdings and Haleon plc, you can compare the effects of market volatilities on Prestige Brand 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 Prestige Brand with a short position of Haleon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prestige Brand and Haleon Plc.
Diversification Opportunities for Prestige Brand and Haleon Plc
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prestige and Haleon is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Prestige Brand Holdings and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc and Prestige Brand 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 Prestige Brand 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 Prestige Brand i.e., Prestige Brand and Haleon Plc go up and down completely randomly.
Pair Corralation between Prestige Brand and Haleon Plc
Considering the 90-day investment horizon Prestige Brand Holdings is expected to generate 1.01 times more return on investment than Haleon Plc. However, Prestige Brand is 1.01 times more volatile than Haleon plc. It trades about 0.05 of its potential returns per unit of risk. Haleon plc is currently generating about 0.05 per unit of risk. If you would invest 6,141 in Prestige Brand Holdings on August 24, 2024 and sell it today you would earn a total of 2,273 from holding Prestige Brand Holdings or generate 37.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Prestige Brand Holdings vs. Haleon plc
Performance |
| Timeline |
| Prestige Brand Holdings |
| Haleon plc |
Prestige Brand and Haleon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prestige Brand and Haleon Plc
The main advantage of trading using opposite Prestige Brand and Haleon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prestige Brand 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.| Prestige Brand vs. Evotec SE ADR | Prestige Brand vs. Supernus Pharmaceuticals | Prestige Brand vs. Collegium Pharmaceutical | Prestige Brand vs. Regencell Bioscience Holdings |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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