Correlation Between Astellas Pharma and Luye Pharma

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

By analyzing existing cross correlation between Astellas Pharma and Luye Pharma Group, you can compare the effects of market volatilities on Astellas Pharma and Luye Pharma 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 Astellas Pharma with a short position of Luye Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astellas Pharma and Luye Pharma.

Diversification Opportunities for Astellas Pharma and Luye Pharma

-0.87

Correlation Coefficient

Astellas Pharma  Luye Pharma

Pay attention - limited upside

The 3 months correlation between Astellas and Luye is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Astellas Pharma and Luye Pharma Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luye Pharma Group and Astellas Pharma 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 Astellas Pharma are associated (or correlated) with Luye Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luye Pharma Group has no effect on the direction of Astellas Pharma i.e., Astellas Pharma and Luye Pharma go up and down completely randomly.

Pair Corralation between Astellas Pharma and Luye Pharma

If you would invest  34.00  in Luye Pharma Group on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Luye Pharma Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Astellas Pharma  vs.  Luye Pharma Group

Astellas Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astellas Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Luye Pharma Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Luye Pharma Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Luye Pharma may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Astellas Pharma and Luye Pharma

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

The idea behind Astellas Pharma and Luye Pharma Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.