Correlation Between AstraZeneca PLC and AVITA Medical
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC and AVITA Medical 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 AstraZeneca PLC and AVITA Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC and AVITA Medical, you can compare the effects of market volatilities on AstraZeneca PLC and AVITA Medical 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 AstraZeneca PLC with a short position of AVITA Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and AVITA Medical.
Diversification Opportunities for AstraZeneca PLC and AVITA Medical
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AstraZeneca and AVITA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC and AVITA Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVITA Medical and AstraZeneca PLC 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 AstraZeneca PLC are associated (or correlated) with AVITA Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVITA Medical has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and AVITA Medical go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and AVITA Medical
Assuming the 90 days trading horizon AstraZeneca PLC is expected to generate 0.39 times more return on investment than AVITA Medical. However, AstraZeneca PLC is 2.58 times less risky than AVITA Medical. It trades about 0.26 of its potential returns per unit of risk. AVITA Medical is currently generating about -0.01 per unit of risk. If you would invest 13,164 in AstraZeneca PLC on November 29, 2024 and sell it today you would earn a total of 1,251 from holding AstraZeneca PLC or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AstraZeneca PLC vs. AVITA Medical
Performance |
| Timeline |
| AstraZeneca PLC |
| AVITA Medical |
AstraZeneca PLC and AVITA Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and AVITA Medical
The main advantage of trading using opposite AstraZeneca PLC and AVITA Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, AVITA Medical 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 AVITA Medical will offset losses from the drop in AVITA Medical's long position.| AstraZeneca PLC vs. Aegean Airlines SA | AstraZeneca PLC vs. SOUTHWEST AIRLINES | AstraZeneca PLC vs. OPKO HEALTH | AstraZeneca PLC vs. UNIDOC HEALTH P |
| AVITA Medical vs. Perseus Mining Limited | AVITA Medical vs. Coeur Mining | AVITA Medical vs. Ringmetall SE | AVITA Medical vs. Xenia Hotels Resorts |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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