Correlation Between Perrigo Company and Haleon Plc
Can any of the company-specific risk be diversified away by investing in both Perrigo Company 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 Perrigo Company and Haleon Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perrigo Company PLC and Haleon plc, you can compare the effects of market volatilities on Perrigo Company 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 Perrigo Company with a short position of Haleon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perrigo Company and Haleon Plc.
Diversification Opportunities for Perrigo Company and Haleon Plc
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perrigo and Haleon is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Perrigo Company PLC and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc and Perrigo Company 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 Perrigo Company PLC 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 Perrigo Company i.e., Perrigo Company and Haleon Plc go up and down completely randomly.
Pair Corralation between Perrigo Company and Haleon Plc
Given the investment horizon of 90 days Perrigo Company is expected to generate 5.15 times less return on investment than Haleon Plc. In addition to that, Perrigo Company is 1.48 times more volatile than Haleon plc. It trades about 0.01 of its total potential returns per unit of risk. Haleon plc is currently generating about 0.04 per unit of volatility. If you would invest 755.00 in Haleon plc on September 2, 2024 and sell it today you would earn a total of 211.00 from holding Haleon plc or generate 27.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perrigo Company PLC vs. Haleon plc
Performance |
| Timeline |
| Perrigo Company |
| Haleon plc |
Perrigo Company and Haleon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perrigo Company and Haleon Plc
The main advantage of trading using opposite Perrigo Company and Haleon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perrigo Company 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.| Perrigo Company vs. Prestige Brand Holdings | Perrigo Company vs. Amphastar P | Perrigo Company vs. Pacira BioSciences, | Perrigo Company vs. Collegium Pharmaceutical |
| Haleon Plc vs. Tff Pharmaceuticals | Haleon Plc vs. Eliem Therapeutics | Haleon Plc vs. Inhibrx | Haleon Plc vs. Enliven Therapeutics |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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