Correlation Between SIGA Technologies and Prestige Brand
Can any of the company-specific risk be diversified away by investing in both SIGA Technologies and Prestige Brand 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 SIGA Technologies and Prestige Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIGA Technologies and Prestige Brand Holdings, you can compare the effects of market volatilities on SIGA Technologies and Prestige Brand 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 SIGA Technologies with a short position of Prestige Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIGA Technologies and Prestige Brand.
Diversification Opportunities for SIGA Technologies and Prestige Brand
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SIGA and Prestige is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SIGA Technologies and Prestige Brand Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Brand Holdings and SIGA Technologies 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 SIGA Technologies are associated (or correlated) with Prestige Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Brand Holdings has no effect on the direction of SIGA Technologies i.e., SIGA Technologies and Prestige Brand go up and down completely randomly.
Pair Corralation between SIGA Technologies and Prestige Brand
Given the investment horizon of 90 days SIGA Technologies is expected to under-perform the Prestige Brand. In addition to that, SIGA Technologies is 2.96 times more volatile than Prestige Brand Holdings. It trades about -0.05 of its total potential returns per unit of risk. Prestige Brand Holdings is currently generating about 0.6 per unit of volatility. If you would invest 7,218 in Prestige Brand Holdings on August 24, 2024 and sell it today you would earn a total of 1,196 from holding Prestige Brand Holdings or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIGA Technologies vs. Prestige Brand Holdings
Performance |
| Timeline |
| SIGA Technologies |
| Prestige Brand Holdings |
SIGA Technologies and Prestige Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIGA Technologies and Prestige Brand
The main advantage of trading using opposite SIGA Technologies and Prestige Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIGA Technologies position performs unexpectedly, Prestige Brand 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 Prestige Brand will offset losses from the drop in Prestige Brand's long position.| SIGA Technologies vs. Elanco Animal Health | SIGA Technologies vs. Esperion Therapeutics | SIGA Technologies vs. Catalent | SIGA Technologies vs. China Pharma Holdings |
| Prestige Brand vs. Evotec SE ADR | Prestige Brand vs. Supernus Pharmaceuticals | Prestige Brand vs. Collegium Pharmaceutical | Prestige Brand vs. Regencell Bioscience Holdings |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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