Correlation Between Santhera Pharmaceuticals and COSMO Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Santhera Pharmaceuticals and COSMO Pharmaceuticals 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 COSMO Pharmaceuticals 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 COSMO Pharmaceuticals SA, you can compare the effects of market volatilities on Santhera Pharmaceuticals and COSMO Pharmaceuticals 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 COSMO Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santhera Pharmaceuticals and COSMO Pharmaceuticals.
Diversification Opportunities for Santhera Pharmaceuticals and COSMO Pharmaceuticals
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Santhera and COSMO is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Santhera Pharmaceuticals Holdi and COSMO Pharmaceuticals SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO Pharmaceuticals 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 COSMO Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO Pharmaceuticals has no effect on the direction of Santhera Pharmaceuticals i.e., Santhera Pharmaceuticals and COSMO Pharmaceuticals go up and down completely randomly.
Pair Corralation between Santhera Pharmaceuticals and COSMO Pharmaceuticals
Assuming the 90 days trading horizon Santhera Pharmaceuticals Holding is expected to generate 1.87 times more return on investment than COSMO Pharmaceuticals. However, Santhera Pharmaceuticals is 1.87 times more volatile than COSMO Pharmaceuticals SA. It trades about -0.16 of its potential returns per unit of risk. COSMO Pharmaceuticals SA is currently generating about -0.39 per unit of risk. If you would invest 910.00 in Santhera Pharmaceuticals Holding on August 28, 2024 and sell it today you would lose (75.00) from holding Santhera Pharmaceuticals Holding or give up 8.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santhera Pharmaceuticals Holdi vs. COSMO Pharmaceuticals SA
Performance |
| Timeline |
| Santhera Pharmaceuticals |
| COSMO Pharmaceuticals |
Santhera Pharmaceuticals and COSMO Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santhera Pharmaceuticals and COSMO Pharmaceuticals
The main advantage of trading using opposite Santhera Pharmaceuticals and COSMO Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santhera Pharmaceuticals position performs unexpectedly, COSMO Pharmaceuticals 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 COSMO Pharmaceuticals will offset losses from the drop in COSMO Pharmaceuticals' long position.| Santhera Pharmaceuticals vs. Basilea Pharmaceutica AG | Santhera Pharmaceuticals vs. Idorsia | Santhera Pharmaceuticals vs. Newron Pharmaceuticals SpA | Santhera Pharmaceuticals vs. Evolva Holding SA |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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