Correlation Between Prestige Brand and Oasmia Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Prestige Brand and Oasmia 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 Prestige Brand and Oasmia Pharmaceutical 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 Oasmia Pharmaceutical AB, you can compare the effects of market volatilities on Prestige Brand and Oasmia 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 Prestige Brand with a short position of Oasmia Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prestige Brand and Oasmia Pharmaceutical.
Diversification Opportunities for Prestige Brand and Oasmia Pharmaceutical
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prestige and Oasmia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Prestige Brand Holdings and Oasmia Pharmaceutical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasmia Pharmaceutical 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 Oasmia Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasmia Pharmaceutical has no effect on the direction of Prestige Brand i.e., Prestige Brand and Oasmia Pharmaceutical go up and down completely randomly.
Pair Corralation between Prestige Brand and Oasmia Pharmaceutical
Considering the 90-day investment horizon Prestige Brand is expected to generate 1.17 times less return on investment than Oasmia Pharmaceutical. But when comparing it to its historical volatility, Prestige Brand Holdings is 19.35 times less risky than Oasmia Pharmaceutical. It trades about 0.05 of its potential returns per unit of risk. Oasmia Pharmaceutical AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Oasmia Pharmaceutical AB on September 4, 2024 and sell it today you would lose (14.00) from holding Oasmia Pharmaceutical AB or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 7.68% |
| Values | Daily Returns |
Prestige Brand Holdings vs. Oasmia Pharmaceutical AB
Performance |
| Timeline |
| Prestige Brand Holdings |
| Oasmia Pharmaceutical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Prestige Brand and Oasmia Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prestige Brand and Oasmia Pharmaceutical
The main advantage of trading using opposite Prestige Brand and Oasmia Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prestige Brand position performs unexpectedly, Oasmia 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 Oasmia Pharmaceutical will offset losses from the drop in Oasmia Pharmaceutical's long position.| Prestige Brand vs. Evotec SE ADR | Prestige Brand vs. Supernus Pharmaceuticals | Prestige Brand vs. Collegium Pharmaceutical | Prestige Brand vs. Silver Spike Investment |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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