Correlation Between Applied Digital and Santen Pharmaceutical

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

By analyzing existing cross correlation between Applied Digital and Santen Pharmaceutical Co, you can compare the effects of market volatilities on Applied Digital and Santen Pharmaceutical 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 Applied Digital with a short position of Santen Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Digital and Santen Pharmaceutical.

Diversification Opportunities for Applied Digital and Santen Pharmaceutical

0.0

Correlation Coefficient

Applied Digital  Santen Pharmaceutical

Pay attention - limited upside

The 3 months correlation between Applied and Santen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Applied Digital and Santen Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santen Pharmaceutical and Applied Digital 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 Applied Digital are associated (or correlated) with Santen Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santen Pharmaceutical has no effect on the direction of Applied Digital i.e., Applied Digital and Santen Pharmaceutical go up and down completely randomly.

Pair Corralation between Applied Digital and Santen Pharmaceutical

If you would invest  792.00  in Applied Digital on December 22, 2024 and sell it today you would lose (85.00) from holding Applied Digital or give up 10.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Applied Digital  vs.  Santen Pharmaceutical Co

Applied Digital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Digital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Applied Digital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Santen Pharmaceutical

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Applied Digital and Santen Pharmaceutical

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

The idea behind Applied Digital and Santen Pharmaceutical Co 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.