Correlation Between Viatris and Sage Therapeutic
Can any of the company-specific risk be diversified away by investing in both Viatris and Sage Therapeutic 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 Sage Therapeutic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viatris and Sage Therapeutic, you can compare the effects of market volatilities on Viatris and Sage Therapeutic 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 Sage Therapeutic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viatris and Sage Therapeutic.
Diversification Opportunities for Viatris and Sage Therapeutic
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Viatris and Sage is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Viatris and Sage Therapeutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Therapeutic 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 Sage Therapeutic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Therapeutic has no effect on the direction of Viatris i.e., Viatris and Sage Therapeutic go up and down completely randomly.
Pair Corralation between Viatris and Sage Therapeutic
Given the investment horizon of 90 days Viatris is expected to generate 0.47 times more return on investment than Sage Therapeutic. However, Viatris is 2.13 times less risky than Sage Therapeutic. It trades about 0.06 of its potential returns per unit of risk. Sage Therapeutic is currently generating about -0.07 per unit of risk. If you would invest 1,164 in Viatris on September 12, 2024 and sell it today you would earn a total of 87.00 from holding Viatris or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viatris vs. Sage Therapeutic
Performance |
| Timeline |
| Viatris |
| Sage Therapeutic |
Viatris and Sage Therapeutic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viatris and Sage Therapeutic
The main advantage of trading using opposite Viatris and Sage Therapeutic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viatris position performs unexpectedly, Sage Therapeutic 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 Sage Therapeutic will offset losses from the drop in Sage Therapeutic's long position.| Viatris vs. Catalent | Viatris vs. Bausch Health Companies | Viatris vs. Tilray Inc | Viatris vs. Takeda Pharmaceutical Co |
| Sage Therapeutic vs. Apellis Pharmaceuticals | Sage Therapeutic vs. Terns Pharmaceuticals | Sage Therapeutic vs. Day One Biopharmaceuticals | Sage Therapeutic vs. Blueprint Medicines Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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