Correlation Between Chia and Santen Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Chia and Santen 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 Chia and Santen Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and Santen Pharmaceutical Co, you can compare the effects of market volatilities on Chia and Santen 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 Chia with a short position of Santen Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and Santen Pharmaceutical.
Diversification Opportunities for Chia and Santen Pharmaceutical
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chia and Santen is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Santen Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santen Pharmaceutical and Chia 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 Chia are associated (or correlated) with Santen Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santen Pharmaceutical has no effect on the direction of Chia i.e., Chia and Santen Pharmaceutical go up and down completely randomly.
Pair Corralation between Chia and Santen Pharmaceutical
Assuming the 90 days trading horizon Chia is expected to under-perform the Santen Pharmaceutical. In addition to that, Chia is 1.92 times more volatile than Santen Pharmaceutical Co. It trades about -0.02 of its total potential returns per unit of risk. Santen Pharmaceutical Co is currently generating about 0.05 per unit of volatility. If you would invest 707.00 in Santen Pharmaceutical Co on November 2, 2024 and sell it today you would earn a total of 346.00 from holding Santen Pharmaceutical Co or generate 48.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.88% |
| Values | Daily Returns |
Chia vs. Santen Pharmaceutical Co
Performance |
| Timeline |
| Chia |
| Santen Pharmaceutical |
Chia and Santen Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and Santen Pharmaceutical
The main advantage of trading using opposite Chia and Santen Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia position performs unexpectedly, Santen 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 Santen Pharmaceutical will offset losses from the drop in Santen Pharmaceutical's long position.The idea behind Chia and Santen Pharmaceutical Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Santen Pharmaceutical vs. Ono Pharmaceutical Co | Santen Pharmaceutical vs. GSK plc | Santen Pharmaceutical vs. Grifols SA ADR | Santen Pharmaceutical vs. Pfizer Inc |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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