Correlation Between Santhera Pharmaceuticals and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Santhera Pharmaceuticals and Barry Callebaut 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 Santhera Pharmaceuticals and Barry Callebaut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santhera Pharmaceuticals Holding and Barry Callebaut AG, you can compare the effects of market volatilities on Santhera Pharmaceuticals and Barry Callebaut 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 Santhera Pharmaceuticals with a short position of Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santhera Pharmaceuticals and Barry Callebaut.
Diversification Opportunities for Santhera Pharmaceuticals and Barry Callebaut
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Santhera and Barry is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Santhera Pharmaceuticals Holdi and Barry Callebaut AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barry Callebaut AG and Santhera Pharmaceuticals 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 Santhera Pharmaceuticals Holding are associated (or correlated) with Barry Callebaut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barry Callebaut AG has no effect on the direction of Santhera Pharmaceuticals i.e., Santhera Pharmaceuticals and Barry Callebaut go up and down completely randomly.
Pair Corralation between Santhera Pharmaceuticals and Barry Callebaut
Assuming the 90 days trading horizon Santhera Pharmaceuticals Holding is expected to generate 3.44 times more return on investment than Barry Callebaut. However, Santhera Pharmaceuticals is 3.44 times more volatile than Barry Callebaut AG. It trades about 0.04 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.03 per unit of risk. If you would invest 510.00 in Santhera Pharmaceuticals Holding on August 26, 2024 and sell it today you would earn a total of 290.00 from holding Santhera Pharmaceuticals Holding or generate 56.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santhera Pharmaceuticals Holdi vs. Barry Callebaut AG
Performance |
| Timeline |
| Santhera Pharmaceuticals |
| Barry Callebaut AG |
Santhera Pharmaceuticals and Barry Callebaut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santhera Pharmaceuticals and Barry Callebaut
The main advantage of trading using opposite Santhera Pharmaceuticals and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santhera Pharmaceuticals position performs unexpectedly, Barry Callebaut 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 Barry Callebaut will offset losses from the drop in Barry Callebaut's long position.The idea behind Santhera Pharmaceuticals Holding and Barry Callebaut AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Barry Callebaut vs. Givaudan SA | Barry Callebaut vs. Chocoladefabriken Lindt Spruengli | Barry Callebaut vs. Chocoladefabriken Lindt Spruengli | Barry Callebaut vs. EMS CHEMIE HOLDING AG |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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