Correlation Between Revance and Emergent Biosolutions
Can any of the company-specific risk be diversified away by investing in both Revance and Emergent Biosolutions 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 Revance and Emergent Biosolutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Revance and Emergent Biosolutions, you can compare the effects of market volatilities on Revance and Emergent Biosolutions 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 Revance with a short position of Emergent Biosolutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revance and Emergent Biosolutions.
Diversification Opportunities for Revance and Emergent Biosolutions
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Revance and Emergent is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Revance and Emergent Biosolutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Biosolutions and Revance 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 Revance are associated (or correlated) with Emergent Biosolutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Biosolutions has no effect on the direction of Revance i.e., Revance and Emergent Biosolutions go up and down completely randomly.
Pair Corralation between Revance and Emergent Biosolutions
Given the investment horizon of 90 days Revance is expected to under-perform the Emergent Biosolutions. In addition to that, Revance is 1.02 times more volatile than Emergent Biosolutions. It trades about -0.24 of its total potential returns per unit of risk. Emergent Biosolutions is currently generating about -0.09 per unit of volatility. If you would invest 997.00 in Emergent Biosolutions on September 14, 2024 and sell it today you would lose (128.00) from holding Emergent Biosolutions or give up 12.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Revance vs. Emergent Biosolutions
Performance |
| Timeline |
| Revance |
| Emergent Biosolutions |
Revance and Emergent Biosolutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Revance and Emergent Biosolutions
The main advantage of trading using opposite Revance and Emergent Biosolutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revance position performs unexpectedly, Emergent Biosolutions 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 Emergent Biosolutions will offset losses from the drop in Emergent Biosolutions' long position.| Revance vs. DiaMedica Therapeutics | Revance vs. Akero Therapeutics | Revance vs. Nuvalent | Revance vs. Immunocore Holdings |
| Emergent Biosolutions vs. Zoetis Inc | Emergent Biosolutions vs. Bausch Health Companies | Emergent Biosolutions vs. Neurocrine Biosciences | Emergent Biosolutions vs. Akanda Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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