Correlation Between Warner Bros and Haleon Plc
Can any of the company-specific risk be diversified away by investing in both Warner Bros and Haleon 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 Warner Bros and Haleon Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warner Bros Discovery and Haleon plc, you can compare the effects of market volatilities on Warner Bros and Haleon 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 Warner Bros with a short position of Haleon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Bros and Haleon Plc.
Diversification Opportunities for Warner Bros and Haleon Plc
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Warner and Haleon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Warner Bros Discovery and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc and Warner Bros 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 Warner Bros Discovery are associated (or correlated) with Haleon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon plc has no effect on the direction of Warner Bros i.e., Warner Bros and Haleon Plc go up and down completely randomly.
Pair Corralation between Warner Bros and Haleon Plc
Considering the 90-day investment horizon Warner Bros Discovery is expected to under-perform the Haleon Plc. In addition to that, Warner Bros is 2.45 times more volatile than Haleon plc. It trades about -0.01 of its total potential returns per unit of risk. Haleon plc is currently generating about 0.04 per unit of volatility. If you would invest 788.00 in Haleon plc on August 27, 2024 and sell it today you would earn a total of 177.00 from holding Haleon plc or generate 22.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warner Bros Discovery vs. Haleon plc
Performance |
| Timeline |
| Warner Bros Discovery |
| Haleon plc |
Warner Bros and Haleon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warner Bros and Haleon Plc
The main advantage of trading using opposite Warner Bros and Haleon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Bros position performs unexpectedly, Haleon 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 Haleon Plc will offset losses from the drop in Haleon Plc's long position.| Warner Bros vs. Atari SA | Warner Bros vs. Victory Square Technologies | Warner Bros vs. Motorsport Gaming Us | Warner Bros vs. Alpha Esports Tech |
| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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