Correlation Between Santhera Pharmaceuticals and Nestl SA
Can any of the company-specific risk be diversified away by investing in both Santhera Pharmaceuticals and Nestl SA 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 Nestl SA 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 Nestl SA, you can compare the effects of market volatilities on Santhera Pharmaceuticals and Nestl SA 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 Nestl SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santhera Pharmaceuticals and Nestl SA.
Diversification Opportunities for Santhera Pharmaceuticals and Nestl SA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Santhera and Nestl is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Santhera Pharmaceuticals Holdi and Nestl SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nestl SA 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 Nestl SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nestl SA has no effect on the direction of Santhera Pharmaceuticals i.e., Santhera Pharmaceuticals and Nestl SA go up and down completely randomly.
Pair Corralation between Santhera Pharmaceuticals and Nestl SA
Assuming the 90 days trading horizon Santhera Pharmaceuticals Holding is expected to generate 2.45 times more return on investment than Nestl SA. However, Santhera Pharmaceuticals is 2.45 times more volatile than Nestl SA. It trades about -0.17 of its potential returns per unit of risk. Nestl SA is currently generating about -0.52 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 (76.00) from holding Santhera Pharmaceuticals Holding or give up 8.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santhera Pharmaceuticals Holdi vs. Nestl SA
Performance |
| Timeline |
| Santhera Pharmaceuticals |
| Nestl SA |
Santhera Pharmaceuticals and Nestl SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santhera Pharmaceuticals and Nestl SA
The main advantage of trading using opposite Santhera Pharmaceuticals and Nestl SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santhera Pharmaceuticals position performs unexpectedly, Nestl SA 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 Nestl SA will offset losses from the drop in Nestl SA's long position.| Santhera Pharmaceuticals vs. Basilea Pharmaceutica AG | Santhera Pharmaceuticals vs. Idorsia | Santhera Pharmaceuticals vs. Newron Pharmaceuticals SpA | Santhera Pharmaceuticals vs. Evolva Holding SA |
| Nestl SA vs. Novartis AG | Nestl SA vs. Roche Holding AG | Nestl SA vs. Zurich Insurance Group | Nestl SA vs. Swiss Re 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges |