Correlation Between HEMOGENYX PHARMPLC and CSL

Can any of the company-specific risk be diversified away by investing in both HEMOGENYX PHARMPLC and CSL 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 HEMOGENYX PHARMPLC and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HEMOGENYX PHARMPLC LS 01 and CSL LTD SPONADR, you can compare the effects of market volatilities on HEMOGENYX PHARMPLC and CSL 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 HEMOGENYX PHARMPLC with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMOGENYX PHARMPLC and CSL.

Diversification Opportunities for HEMOGENYX PHARMPLC and CSL

-0.09

Correlation Coefficient

HEMOGENYX PHARMPLC  CSL

Good diversification

The 3 months correlation between HEMOGENYX and CSL is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding HEMOGENYX PHARMPLC LS 01 and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR and HEMOGENYX PHARMPLC 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 HEMOGENYX PHARMPLC LS 01 are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of HEMOGENYX PHARMPLC i.e., HEMOGENYX PHARMPLC and CSL go up and down completely randomly.

Pair Corralation between HEMOGENYX PHARMPLC and CSL

Assuming the 90 days horizon HEMOGENYX PHARMPLC LS 01 is expected to generate 32.05 times more return on investment than CSL. However, HEMOGENYX PHARMPLC is 32.05 times more volatile than CSL LTD SPONADR. It trades about 0.05 of its potential returns per unit of risk. CSL LTD SPONADR is currently generating about 0.0 per unit of risk. If you would invest  1,440  in HEMOGENYX PHARMPLC LS 01 on October 8, 2024 and sell it today you would lose (944.00) from holding HEMOGENYX PHARMPLC LS 01 or give up 65.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

HEMOGENYX PHARMPLC LS 01  vs.  CSL LTD SPONADR

HEMOGENYX PHARMPLC

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days HEMOGENYX PHARMPLC LS 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, HEMOGENYX PHARMPLC reported solid returns over the last few months and may actually be approaching a breakup point.

CSL LTD SPONADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSL LTD SPONADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, CSL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HEMOGENYX PHARMPLC and CSL

The main advantage of trading using opposite HEMOGENYX PHARMPLC and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMOGENYX PHARMPLC position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.

The idea behind HEMOGENYX PHARMPLC LS 01 and CSL LTD SPONADR 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.