Correlation Between Teva Pharma and Viatris
Can any of the company-specific risk be diversified away by investing in both Teva Pharma and Viatris 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 Viatris 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 Viatris, you can compare the effects of market volatilities on Teva Pharma and Viatris 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 Viatris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharma and Viatris.
Diversification Opportunities for Teva Pharma and Viatris
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Teva and Viatris is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharma Industries and Viatris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viatris 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 Viatris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viatris has no effect on the direction of Teva Pharma i.e., Teva Pharma and Viatris go up and down completely randomly.
Pair Corralation between Teva Pharma and Viatris
Given the investment horizon of 90 days Teva Pharma Industries is expected to under-perform the Viatris. But the stock apears to be less risky and, when comparing its historical volatility, Teva Pharma Industries is 1.28 times less risky than Viatris. The stock trades about -0.09 of its potential returns per unit of risk. The Viatris is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,189 in Viatris on August 31, 2024 and sell it today you would earn a total of 133.00 from holding Viatris or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teva Pharma Industries vs. Viatris
Performance |
| Timeline |
| Teva Pharma Industries |
| Viatris |
Teva Pharma and Viatris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teva Pharma and Viatris
The main advantage of trading using opposite Teva Pharma and Viatris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharma position performs unexpectedly, Viatris 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 Viatris will offset losses from the drop in Viatris' long position.| Teva Pharma vs. Emergent Biosolutions | Teva Pharma vs. Bausch Health Companies | Teva Pharma vs. Neurocrine Biosciences | Teva Pharma vs. Haleon plc |
| Viatris vs. Emergent Biosolutions | Viatris vs. Bausch Health Companies | Viatris vs. Neurocrine Biosciences | Viatris vs. Teva Pharma 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |