Correlation Between Viatris and Sol Gel
Can any of the company-specific risk be diversified away by investing in both Viatris and Sol Gel 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 Sol Gel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viatris and Sol Gel Technologies, you can compare the effects of market volatilities on Viatris and Sol Gel 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 Sol Gel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viatris and Sol Gel.
Diversification Opportunities for Viatris and Sol Gel
Very good diversification
The 3 months correlation between Viatris and Sol is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Viatris and Sol Gel Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sol Gel Technologies 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 Sol Gel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sol Gel Technologies has no effect on the direction of Viatris i.e., Viatris and Sol Gel go up and down completely randomly.
Pair Corralation between Viatris and Sol Gel
Given the investment horizon of 90 days Viatris is expected to under-perform the Sol Gel. But the stock apears to be less risky and, when comparing its historical volatility, Viatris is 46.5 times less risky than Sol Gel. The stock trades about -0.18 of its potential returns per unit of risk. The Sol Gel Technologies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Sol Gel Technologies on September 27, 2024 and sell it today you would earn a total of 107.00 from holding Sol Gel Technologies or generate 184.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viatris vs. Sol Gel Technologies
Performance |
| Timeline |
| Viatris |
| Sol Gel Technologies |
Viatris and Sol Gel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viatris and Sol Gel
The main advantage of trading using opposite Viatris and Sol Gel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viatris position performs unexpectedly, Sol Gel 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 Sol Gel will offset losses from the drop in Sol Gel's long position.| Viatris vs. Oric Pharmaceuticals | Viatris vs. Lyra Therapeutics | Viatris vs. Inhibrx | Viatris vs. ESSA Pharma |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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