Correlation Between Viatris and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Viatris and AstraZeneca 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 Viatris and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viatris and AstraZeneca PLC ADR, you can compare the effects of market volatilities on Viatris and AstraZeneca 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 Viatris with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viatris and AstraZeneca PLC.
Diversification Opportunities for Viatris and AstraZeneca PLC
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Viatris and AstraZeneca is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Viatris and AstraZeneca PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC ADR and Viatris 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 Viatris are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC ADR has no effect on the direction of Viatris i.e., Viatris and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Viatris and AstraZeneca PLC
Given the investment horizon of 90 days Viatris is expected to generate 1.52 times more return on investment than AstraZeneca PLC. However, Viatris is 1.52 times more volatile than AstraZeneca PLC ADR. It trades about 0.1 of its potential returns per unit of risk. AstraZeneca PLC ADR is currently generating about -0.28 per unit of risk. If you would invest 1,175 in Viatris on August 26, 2024 and sell it today you would earn a total of 162.00 from holding Viatris or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viatris vs. AstraZeneca PLC ADR
Performance |
| Timeline |
| Viatris |
| AstraZeneca PLC ADR |
Viatris and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viatris and AstraZeneca PLC
The main advantage of trading using opposite Viatris and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viatris position performs unexpectedly, AstraZeneca 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Viatris vs. Capricor Therapeutics | Viatris vs. Soleno Therapeutics | Viatris vs. Bio Path Holdings | Viatris vs. Moleculin Biotech |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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