Correlation Between Viatris and Collegium Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Viatris and Collegium Pharmaceutical 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 Collegium Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viatris and Collegium Pharmaceutical, you can compare the effects of market volatilities on Viatris and Collegium Pharmaceutical 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 Collegium Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viatris and Collegium Pharmaceutical.
Diversification Opportunities for Viatris and Collegium Pharmaceutical
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Viatris and Collegium is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Viatris and Collegium Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegium Pharmaceutical 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 Collegium Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegium Pharmaceutical has no effect on the direction of Viatris i.e., Viatris and Collegium Pharmaceutical go up and down completely randomly.
Pair Corralation between Viatris and Collegium Pharmaceutical
Given the investment horizon of 90 days Viatris is expected to generate 1.29 times more return on investment than Collegium Pharmaceutical. However, Viatris is 1.29 times more volatile than Collegium Pharmaceutical. It trades about 0.21 of its potential returns per unit of risk. Collegium Pharmaceutical is currently generating about -0.29 per unit of risk. If you would invest 1,155 in Viatris on August 24, 2024 and sell it today you would earn a total of 170.00 from holding Viatris or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viatris vs. Collegium Pharmaceutical
Performance |
| Timeline |
| Viatris |
| Collegium Pharmaceutical |
Viatris and Collegium Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viatris and Collegium Pharmaceutical
The main advantage of trading using opposite Viatris and Collegium Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viatris position performs unexpectedly, Collegium Pharmaceutical 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 Collegium Pharmaceutical will offset losses from the drop in Collegium Pharmaceutical's long position.| Viatris vs. Catalent | Viatris vs. Bausch Health Companies | Viatris vs. Tilray Inc | Viatris vs. Takeda Pharmaceutical Co |
| Collegium Pharmaceutical vs. Phibro Animal Health | Collegium Pharmaceutical vs. ANI Pharmaceuticals | Collegium Pharmaceutical vs. Procaps Group SA | Collegium Pharmaceutical vs. Amphastar P |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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