Correlation Between Sanofi ADR and Otsuka Holdings
Can any of the company-specific risk be diversified away by investing in both Sanofi ADR and Otsuka Holdings 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 Sanofi ADR and Otsuka Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanofi ADR and Otsuka Holdings Co, you can compare the effects of market volatilities on Sanofi ADR and Otsuka Holdings 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 Sanofi ADR with a short position of Otsuka Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanofi ADR and Otsuka Holdings.
Diversification Opportunities for Sanofi ADR and Otsuka Holdings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sanofi and Otsuka is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sanofi ADR and Otsuka Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka Holdings and Sanofi ADR 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 Sanofi ADR are associated (or correlated) with Otsuka Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka Holdings has no effect on the direction of Sanofi ADR i.e., Sanofi ADR and Otsuka Holdings go up and down completely randomly.
Pair Corralation between Sanofi ADR and Otsuka Holdings
Considering the 90-day investment horizon Sanofi ADR is expected to generate 5.04 times less return on investment than Otsuka Holdings. But when comparing it to its historical volatility, Sanofi ADR is 1.28 times less risky than Otsuka Holdings. It trades about 0.01 of its potential returns per unit of risk. Otsuka Holdings Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,149 in Otsuka Holdings Co on August 27, 2024 and sell it today you would earn a total of 799.00 from holding Otsuka Holdings Co or generate 25.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 59.68% |
| Values | Daily Returns |
Sanofi ADR vs. Otsuka Holdings Co
Performance |
| Timeline |
| Sanofi ADR |
| Otsuka Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sanofi ADR and Otsuka Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanofi ADR and Otsuka Holdings
The main advantage of trading using opposite Sanofi ADR and Otsuka Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanofi ADR position performs unexpectedly, Otsuka Holdings 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 Otsuka Holdings will offset losses from the drop in Otsuka Holdings' long position.| Sanofi ADR vs. AstraZeneca PLC ADR | Sanofi ADR vs. Roche Holding Ltd | Sanofi ADR vs. GlaxoSmithKline PLC ADR | Sanofi ADR vs. Merck Company |
| Otsuka Holdings vs. Astellas Pharma | Otsuka Holdings vs. Sanofi ADR | Otsuka Holdings vs. Novartis AG ADR | Otsuka Holdings vs. Biogen Inc |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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