Correlation Between Redhill Biopharma and Alimera Sciences
Can any of the company-specific risk be diversified away by investing in both Redhill Biopharma and Alimera Sciences 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 Redhill Biopharma and Alimera Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redhill Biopharma and Alimera Sciences, you can compare the effects of market volatilities on Redhill Biopharma and Alimera Sciences 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 Redhill Biopharma with a short position of Alimera Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redhill Biopharma and Alimera Sciences.
Diversification Opportunities for Redhill Biopharma and Alimera Sciences
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Redhill and Alimera is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Redhill Biopharma and Alimera Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimera Sciences and Redhill Biopharma 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 Redhill Biopharma are associated (or correlated) with Alimera Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimera Sciences has no effect on the direction of Redhill Biopharma i.e., Redhill Biopharma and Alimera Sciences go up and down completely randomly.
Pair Corralation between Redhill Biopharma and Alimera Sciences
Given the investment horizon of 90 days Redhill Biopharma is expected to under-perform the Alimera Sciences. In addition to that, Redhill Biopharma is 2.38 times more volatile than Alimera Sciences. It trades about -0.01 of its total potential returns per unit of risk. Alimera Sciences is currently generating about 0.05 per unit of volatility. If you would invest 282.00 in Alimera Sciences on October 23, 2024 and sell it today you would earn a total of 272.00 from holding Alimera Sciences or generate 96.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.59% |
| Values | Daily Returns |
Redhill Biopharma vs. Alimera Sciences
Performance |
| Timeline |
| Redhill Biopharma |
| Alimera Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Redhill Biopharma and Alimera Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redhill Biopharma and Alimera Sciences
The main advantage of trading using opposite Redhill Biopharma and Alimera Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redhill Biopharma position performs unexpectedly, Alimera Sciences 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 Alimera Sciences will offset losses from the drop in Alimera Sciences' long position.| Redhill Biopharma vs. Organogenesis Holdings | Redhill Biopharma vs. Lifecore Biomedical | Redhill Biopharma vs. Collegium Pharmaceutical | Redhill Biopharma vs. Aquestive Therapeutics |
| Alimera Sciences vs. Shuttle Pharmaceuticals | Alimera Sciences vs. Lifecore Biomedical | Alimera Sciences vs. Journey Medical Corp | Alimera Sciences vs. Organogenesis Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stocks Directory Find actively traded stocks across global markets |