Correlation Between Amarantus Bioscience and Elite Pharma

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

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

Diversification Opportunities for Amarantus Bioscience and Elite Pharma

-0.22

Correlation Coefficient

Amarantus Bioscience  Elite Pharma

Very good diversification

The 3 months correlation between Amarantus and Elite is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Amarantus Bioscience Holdings and Elite Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Pharma and Amarantus Bioscience 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 Amarantus Bioscience Holdings are associated (or correlated) with Elite Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Pharma has no effect on the direction of Amarantus Bioscience i.e., Amarantus Bioscience and Elite Pharma go up and down completely randomly.

Pair Corralation between Amarantus Bioscience and Elite Pharma

If you would invest  0.01  in Amarantus Bioscience Holdings on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Amarantus Bioscience Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Amarantus Bioscience Holdings  vs.  Elite Pharma

Amarantus Bioscience

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amarantus Bioscience Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental drivers, Amarantus Bioscience unveiled solid returns over the last few months and may actually be approaching a breakup point.

Elite Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elite Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Elite Pharma is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Amarantus Bioscience and Elite Pharma

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

The idea behind Amarantus Bioscience Holdings and Elite Pharma 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.