Correlation Between Viatris and Prestige Brand
Can any of the company-specific risk be diversified away by investing in both Viatris and Prestige Brand 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 Prestige Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viatris and Prestige Brand Holdings, you can compare the effects of market volatilities on Viatris and Prestige Brand 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 Prestige Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viatris and Prestige Brand.
Diversification Opportunities for Viatris and Prestige Brand
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Viatris and Prestige is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Viatris and Prestige Brand Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Brand Holdings 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 Prestige Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Brand Holdings has no effect on the direction of Viatris i.e., Viatris and Prestige Brand go up and down completely randomly.
Pair Corralation between Viatris and Prestige Brand
Given the investment horizon of 90 days Viatris is expected to generate 1.05 times less return on investment than Prestige Brand. In addition to that, Viatris is 2.76 times more volatile than Prestige Brand Holdings. It trades about 0.21 of its total potential returns per unit of risk. Prestige Brand Holdings is currently generating about 0.6 per unit of volatility. If you would invest 7,218 in Prestige Brand Holdings on August 24, 2024 and sell it today you would earn a total of 1,196 from holding Prestige Brand Holdings or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viatris vs. Prestige Brand Holdings
Performance |
| Timeline |
| Viatris |
| Prestige Brand Holdings |
Viatris and Prestige Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viatris and Prestige Brand
The main advantage of trading using opposite Viatris and Prestige Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viatris position performs unexpectedly, Prestige Brand 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 Prestige Brand will offset losses from the drop in Prestige Brand's long position.| Viatris vs. Catalent | Viatris vs. Bausch Health Companies | Viatris vs. Tilray Inc | Viatris vs. Takeda Pharmaceutical Co |
| Prestige Brand vs. Evotec SE ADR | Prestige Brand vs. Supernus Pharmaceuticals | Prestige Brand vs. Collegium Pharmaceutical | Prestige Brand vs. Regencell Bioscience Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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