Correlation Between Procaps Group and Sihuan Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Procaps Group and Sihuan 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 Procaps Group and Sihuan Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procaps Group SA and Sihuan Pharmaceutical Holdings, you can compare the effects of market volatilities on Procaps Group and Sihuan 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 Procaps Group with a short position of Sihuan Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procaps Group and Sihuan Pharmaceutical.
Diversification Opportunities for Procaps Group and Sihuan Pharmaceutical
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Procaps and Sihuan is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Procaps Group SA and Sihuan Pharmaceutical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sihuan Pharmaceutical and Procaps Group 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 Procaps Group SA are associated (or correlated) with Sihuan Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sihuan Pharmaceutical has no effect on the direction of Procaps Group i.e., Procaps Group and Sihuan Pharmaceutical go up and down completely randomly.
Pair Corralation between Procaps Group and Sihuan Pharmaceutical
Assuming the 90 days horizon Procaps Group SA is expected to generate 29.75 times more return on investment than Sihuan Pharmaceutical. However, Procaps Group is 29.75 times more volatile than Sihuan Pharmaceutical Holdings. It trades about 0.14 of its potential returns per unit of risk. Sihuan Pharmaceutical Holdings is currently generating about 0.05 per unit of risk. If you would invest 9.00 in Procaps Group SA on August 28, 2024 and sell it today you would lose (7.90) from holding Procaps Group SA or give up 87.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.31% |
| Values | Daily Returns |
Procaps Group SA vs. Sihuan Pharmaceutical Holdings
Performance |
| Timeline |
| Procaps Group SA |
| Sihuan Pharmaceutical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Procaps Group and Sihuan Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procaps Group and Sihuan Pharmaceutical
The main advantage of trading using opposite Procaps Group and Sihuan Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procaps Group position performs unexpectedly, Sihuan 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 Sihuan Pharmaceutical will offset losses from the drop in Sihuan Pharmaceutical's long position.| Procaps Group vs. Procaps Group SA | Procaps Group vs. Quantum Si incorporated | Procaps Group vs. Jasper Therapeutics |
| Sihuan Pharmaceutical vs. Procaps Group SA | Sihuan Pharmaceutical vs. Phibro Animal Health | Sihuan Pharmaceutical vs. Cann American Corp | Sihuan Pharmaceutical vs. Shuttle Pharmaceuticals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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