Correlation Between Collegium Pharmaceutical and Amphastar

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

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

Diversification Opportunities for Collegium Pharmaceutical and Amphastar

0.34

Correlation Coefficient

Collegium Pharmaceutical  Amphastar

Weak diversification

The 3 months correlation between Collegium and Amphastar is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Amphastar P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphastar P and Collegium Pharmaceutical 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 Collegium Pharmaceutical are associated (or correlated) with Amphastar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphastar P has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Amphastar go up and down completely randomly.

Pair Corralation between Collegium Pharmaceutical and Amphastar

Given the investment horizon of 90 days Collegium Pharmaceutical is expected to under-perform the Amphastar. But the stock apears to be less risky and, when comparing its historical volatility, Collegium Pharmaceutical is 1.1 times less risky than Amphastar. The stock trades about -0.12 of its potential returns per unit of risk. The Amphastar P is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  4,698  in Amphastar P on August 31, 2024 and sell it today you would lose (177.00) from holding Amphastar P or give up 3.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Collegium Pharmaceutical  vs.  Amphastar P

Collegium Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Collegium Pharmaceutical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amphastar P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amphastar P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Amphastar is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Collegium Pharmaceutical and Amphastar

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

The idea behind Collegium Pharmaceutical and Amphastar P 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.