Correlation Between Santhera Pharmaceuticals and HBM Healthcare
Can any of the company-specific risk be diversified away by investing in both Santhera Pharmaceuticals and HBM Healthcare 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 HBM Healthcare 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 HBM Healthcare Investments, you can compare the effects of market volatilities on Santhera Pharmaceuticals and HBM Healthcare 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 HBM Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santhera Pharmaceuticals and HBM Healthcare.
Diversification Opportunities for Santhera Pharmaceuticals and HBM Healthcare
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Santhera and HBM is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Santhera Pharmaceuticals Holdi and HBM Healthcare Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HBM Healthcare Inves 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 HBM Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HBM Healthcare Inves has no effect on the direction of Santhera Pharmaceuticals i.e., Santhera Pharmaceuticals and HBM Healthcare go up and down completely randomly.
Pair Corralation between Santhera Pharmaceuticals and HBM Healthcare
Assuming the 90 days trading horizon Santhera Pharmaceuticals Holding is expected to under-perform the HBM Healthcare. In addition to that, Santhera Pharmaceuticals is 1.59 times more volatile than HBM Healthcare Investments. It trades about -0.01 of its total potential returns per unit of risk. HBM Healthcare Investments is currently generating about 0.03 per unit of volatility. If you would invest 16,731 in HBM Healthcare Investments on September 2, 2024 and sell it today you would earn a total of 1,489 from holding HBM Healthcare Investments or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santhera Pharmaceuticals Holdi vs. HBM Healthcare Investments
Performance |
| Timeline |
| Santhera Pharmaceuticals |
| HBM Healthcare Inves |
Santhera Pharmaceuticals and HBM Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santhera Pharmaceuticals and HBM Healthcare
The main advantage of trading using opposite Santhera Pharmaceuticals and HBM Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santhera Pharmaceuticals position performs unexpectedly, HBM Healthcare 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 HBM Healthcare will offset losses from the drop in HBM Healthcare's long position.The idea behind Santhera Pharmaceuticals Holding and HBM Healthcare Investments 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.| HBM Healthcare vs. BB Biotech AG | HBM Healthcare vs. Partners Group Holding | HBM Healthcare vs. Tecan Group AG | HBM Healthcare vs. VAT Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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