Correlation Between 00108WAF7 and Harmony Biosciences

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Can any of the company-specific risk be diversified away by investing in both 00108WAF7 and Harmony Biosciences 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 00108WAF7 and Harmony Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEP TEX INC and Harmony Biosciences Holdings, you can compare the effects of market volatilities on 00108WAF7 and Harmony Biosciences 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 00108WAF7 with a short position of Harmony Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and Harmony Biosciences.

Diversification Opportunities for 00108WAF7 and Harmony Biosciences

00108WAF7HarmonyDiversified Away00108WAF7HarmonyDiversified Away100%
-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between 00108WAF7 and Harmony is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and Harmony Biosciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Biosciences and 00108WAF7 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 AEP TEX INC are associated (or correlated) with Harmony Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Biosciences has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and Harmony Biosciences go up and down completely randomly.

Pair Corralation between 00108WAF7 and Harmony Biosciences

Assuming the 90 days trading horizon AEP TEX INC is expected to generate 0.38 times more return on investment than Harmony Biosciences. However, AEP TEX INC is 2.63 times less risky than Harmony Biosciences. It trades about 0.25 of its potential returns per unit of risk. Harmony Biosciences Holdings is currently generating about -0.16 per unit of risk. If you would invest  7,206  in AEP TEX INC on November 25, 2024 and sell it today you would earn a total of  333.00  from holding AEP TEX INC or generate 4.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy90.48%
ValuesDaily Returns

AEP TEX INC  vs.  Harmony Biosciences Holdings

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505101520
JavaScript chart by amCharts 3.21.1500108WAF7 HRMY
       Timeline  
AEP TEX INC 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in AEP TEX INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 00108WAF7 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.1528249023717273747576
Harmony Biosciences 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Harmony Biosciences Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Harmony Biosciences is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3234363840

00108WAF7 and Harmony Biosciences Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.7-1.27-0.84-0.41-0.02140.330.761.191.622.05 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.1500108WAF7 HRMY
       Returns  

Pair Trading with 00108WAF7 and Harmony Biosciences

The main advantage of trading using opposite 00108WAF7 and Harmony Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, Harmony Biosciences 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 Harmony Biosciences will offset losses from the drop in Harmony Biosciences' long position.
The idea behind AEP TEX INC and Harmony Biosciences Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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