Correlation Between Teva Pharma and Silence Therapeutics
Can any of the company-specific risk be diversified away by investing in both Teva Pharma and Silence Therapeutics 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 Silence Therapeutics 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 Silence Therapeutics PLC, you can compare the effects of market volatilities on Teva Pharma and Silence Therapeutics 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 Silence Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharma and Silence Therapeutics.
Diversification Opportunities for Teva Pharma and Silence Therapeutics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teva and Silence is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharma Industries and Silence Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silence Therapeutics PLC 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 Silence Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silence Therapeutics PLC has no effect on the direction of Teva Pharma i.e., Teva Pharma and Silence Therapeutics go up and down completely randomly.
Pair Corralation between Teva Pharma and Silence Therapeutics
Given the investment horizon of 90 days Teva Pharma Industries is expected to generate 0.49 times more return on investment than Silence Therapeutics. However, Teva Pharma Industries is 2.03 times less risky than Silence Therapeutics. It trades about 0.11 of its potential returns per unit of risk. Silence Therapeutics PLC is currently generating about -0.04 per unit of risk. If you would invest 997.00 in Teva Pharma Industries on September 2, 2024 and sell it today you would earn a total of 681.00 from holding Teva Pharma Industries or generate 68.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teva Pharma Industries vs. Silence Therapeutics PLC
Performance |
| Timeline |
| Teva Pharma Industries |
| Silence Therapeutics PLC |
Teva Pharma and Silence Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teva Pharma and Silence Therapeutics
The main advantage of trading using opposite Teva Pharma and Silence Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharma position performs unexpectedly, Silence Therapeutics 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 Silence Therapeutics will offset losses from the drop in Silence Therapeutics' long position.| Teva Pharma vs. Haleon plc | Teva Pharma vs. Bausch Health Companies | Teva Pharma vs. Zoetis Inc | Teva Pharma vs. Takeda Pharmaceutical Co |
| Silence Therapeutics vs. Tff Pharmaceuticals | Silence Therapeutics vs. Eliem Therapeutics | Silence Therapeutics vs. Inhibrx | Silence Therapeutics vs. Enliven Therapeutics |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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