Correlation Between Teva Pharma and Marimed
Can any of the company-specific risk be diversified away by investing in both Teva Pharma and Marimed 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 Marimed 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 Marimed, you can compare the effects of market volatilities on Teva Pharma and Marimed 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 Marimed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharma and Marimed.
Diversification Opportunities for Teva Pharma and Marimed
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Teva and Marimed is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharma Industries and Marimed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimed 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 Marimed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimed has no effect on the direction of Teva Pharma i.e., Teva Pharma and Marimed go up and down completely randomly.
Pair Corralation between Teva Pharma and Marimed
Given the investment horizon of 90 days Teva Pharma Industries is expected to under-perform the Marimed. But the stock apears to be less risky and, when comparing its historical volatility, Teva Pharma Industries is 1.63 times less risky than Marimed. The stock trades about -0.23 of its potential returns per unit of risk. The Marimed is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Marimed on November 3, 2024 and sell it today you would lose (1.00) from holding Marimed or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teva Pharma Industries vs. Marimed
Performance |
| Timeline |
| Teva Pharma Industries |
| Marimed |
Teva Pharma and Marimed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teva Pharma and Marimed
The main advantage of trading using opposite Teva Pharma and Marimed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharma position performs unexpectedly, Marimed 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 Marimed will offset losses from the drop in Marimed'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 |
| Marimed vs. Verano Holdings Corp | Marimed vs. Cresco Labs | Marimed vs. AYR Strategies Class | Marimed vs. Green Thumb Industries |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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