Correlation Between Duopharma Biotech and Swift Haulage

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

By analyzing existing cross correlation between Duopharma Biotech Bhd and Swift Haulage Bhd, you can compare the effects of market volatilities on Duopharma Biotech and Swift Haulage 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 Duopharma Biotech with a short position of Swift Haulage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duopharma Biotech and Swift Haulage.

Diversification Opportunities for Duopharma Biotech and Swift Haulage

0.03

Correlation Coefficient

Duopharma Biotech  Swift Haulage

Significant diversification

The 3 months correlation between Duopharma and Swift is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Duopharma Biotech Bhd and Swift Haulage Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swift Haulage Bhd and Duopharma Biotech 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 Duopharma Biotech Bhd are associated (or correlated) with Swift Haulage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swift Haulage Bhd has no effect on the direction of Duopharma Biotech i.e., Duopharma Biotech and Swift Haulage go up and down completely randomly.

Pair Corralation between Duopharma Biotech and Swift Haulage

Assuming the 90 days trading horizon Duopharma Biotech Bhd is expected to under-perform the Swift Haulage. But the stock apears to be less risky and, when comparing its historical volatility, Duopharma Biotech Bhd is 1.2 times less risky than Swift Haulage. The stock trades about -0.01 of its potential returns per unit of risk. The Swift Haulage Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  43.00  in Swift Haulage Bhd on December 2, 2024 and sell it today you would lose (1.00) from holding Swift Haulage Bhd or give up 2.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Duopharma Biotech Bhd  vs.  Swift Haulage Bhd

Duopharma Biotech Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duopharma Biotech Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Duopharma Biotech is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Swift Haulage Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Swift Haulage Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Duopharma Biotech and Swift Haulage

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

The idea behind Duopharma Biotech Bhd and Swift Haulage Bhd 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.