Correlation Between Vericel Corp and Haleon Plc
Can any of the company-specific risk be diversified away by investing in both Vericel Corp and Haleon Plc 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 Vericel Corp and Haleon Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vericel Corp Ord and Haleon plc, you can compare the effects of market volatilities on Vericel Corp and Haleon Plc 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 Vericel Corp with a short position of Haleon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vericel Corp and Haleon Plc.
Diversification Opportunities for Vericel Corp and Haleon Plc
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vericel and Haleon is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc and Vericel Corp 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 Vericel Corp Ord are associated (or correlated) with Haleon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon plc has no effect on the direction of Vericel Corp i.e., Vericel Corp and Haleon Plc go up and down completely randomly.
Pair Corralation between Vericel Corp and Haleon Plc
Given the investment horizon of 90 days Vericel Corp Ord is expected to generate 2.3 times more return on investment than Haleon Plc. However, Vericel Corp is 2.3 times more volatile than Haleon plc. It trades about 0.06 of its potential returns per unit of risk. Haleon plc is currently generating about 0.03 per unit of risk. If you would invest 3,829 in Vericel Corp Ord on September 12, 2024 and sell it today you would earn a total of 1,927 from holding Vericel Corp Ord or generate 50.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vericel Corp Ord vs. Haleon plc
Performance |
| Timeline |
| Vericel Corp Ord |
| Haleon plc |
Vericel Corp and Haleon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vericel Corp and Haleon Plc
The main advantage of trading using opposite Vericel Corp and Haleon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vericel Corp position performs unexpectedly, Haleon Plc 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 Haleon Plc will offset losses from the drop in Haleon Plc's long position.| Vericel Corp vs. Collplant Biotechnologies | Vericel Corp vs. Keros Therapeutics | Vericel Corp vs. Merus BV | Vericel Corp vs. Century Therapeutics |
| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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