Correlation Between Teva Pharma and Aleafia Health
Can any of the company-specific risk be diversified away by investing in both Teva Pharma and Aleafia Health 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 Teva Pharma and Aleafia Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teva Pharma Industries and Aleafia Health, you can compare the effects of market volatilities on Teva Pharma and Aleafia Health 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 Teva Pharma with a short position of Aleafia Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharma and Aleafia Health.
Diversification Opportunities for Teva Pharma and Aleafia Health
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teva and Aleafia is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharma Industries and Aleafia Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aleafia Health and Teva Pharma 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 Teva Pharma Industries are associated (or correlated) with Aleafia Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aleafia Health has no effect on the direction of Teva Pharma i.e., Teva Pharma and Aleafia Health go up and down completely randomly.
Pair Corralation between Teva Pharma and Aleafia Health
Given the investment horizon of 90 days Teva Pharma Industries is expected to generate 0.48 times more return on investment than Aleafia Health. However, Teva Pharma Industries is 2.07 times less risky than Aleafia Health. It trades about 0.07 of its potential returns per unit of risk. Aleafia Health is currently generating about -0.04 per unit of risk. If you would invest 869.00 in Teva Pharma Industries on September 2, 2024 and sell it today you would earn a total of 809.00 from holding Teva Pharma Industries or generate 93.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.06% |
| Values | Daily Returns |
Teva Pharma Industries vs. Aleafia Health
Performance |
| Timeline |
| Teva Pharma Industries |
| Aleafia Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Teva Pharma and Aleafia Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teva Pharma and Aleafia Health
The main advantage of trading using opposite Teva Pharma and Aleafia Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharma position performs unexpectedly, Aleafia Health 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 Aleafia Health will offset losses from the drop in Aleafia Health's long position.| Teva Pharma vs. Haleon plc | Teva Pharma vs. Bausch Health Companies | Teva Pharma vs. Zoetis Inc | Teva Pharma vs. Takeda Pharmaceutical Co |
| Aleafia Health vs. Acreage Holdings | Aleafia Health vs. Verano Holdings Corp | Aleafia Health vs. Pharmagreen Biotech | Aleafia Health vs. Mydecine Innovations Group |
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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