Correlation Between Teva Pharma and Curaleaf Holdings
Can any of the company-specific risk be diversified away by investing in both Teva Pharma and Curaleaf 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 Teva Pharma and Curaleaf Holdings 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 Curaleaf Holdings, you can compare the effects of market volatilities on Teva Pharma and Curaleaf 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 Teva Pharma with a short position of Curaleaf Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharma and Curaleaf Holdings.
Diversification Opportunities for Teva Pharma and Curaleaf Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teva and Curaleaf is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharma Industries and Curaleaf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curaleaf Holdings 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 Curaleaf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curaleaf Holdings has no effect on the direction of Teva Pharma i.e., Teva Pharma and Curaleaf Holdings go up and down completely randomly.
Pair Corralation between Teva Pharma and Curaleaf Holdings
Given the investment horizon of 90 days Teva Pharma Industries is expected to generate 0.19 times more return on investment than Curaleaf Holdings. However, Teva Pharma Industries is 5.16 times less risky than Curaleaf Holdings. It trades about -0.16 of its potential returns per unit of risk. Curaleaf Holdings is currently generating about -0.16 per unit of risk. If you would invest 1,841 in Teva Pharma Industries on August 24, 2024 and sell it today you would lose (133.00) from holding Teva Pharma Industries or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Teva Pharma Industries vs. Curaleaf Holdings
Performance |
| Timeline |
| Teva Pharma Industries |
| Curaleaf Holdings |
Teva Pharma and Curaleaf Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teva Pharma and Curaleaf Holdings
The main advantage of trading using opposite Teva Pharma and Curaleaf Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharma position performs unexpectedly, Curaleaf 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 Curaleaf Holdings will offset losses from the drop in Curaleaf Holdings' long position.| Teva Pharma vs. Haleon plc | Teva Pharma vs. Bausch Health Companies | Teva Pharma vs. Zoetis Inc | Teva Pharma vs. Takeda Pharmaceutical Co |
| Curaleaf Holdings vs. Green Cures Botanical | Curaleaf Holdings vs. Rimrock Gold Corp | Curaleaf Holdings vs. Galexxy Holdings | Curaleaf Holdings vs. Indoor Harvest Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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