Correlation Between Collegium Pharmaceutical and WiMi Hologram

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

By analyzing existing cross correlation between Collegium Pharmaceutical and WiMi Hologram Cloud, you can compare the effects of market volatilities on Collegium Pharmaceutical and WiMi Hologram 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 WiMi Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and WiMi Hologram.

Diversification Opportunities for Collegium Pharmaceutical and WiMi Hologram

-0.03

Correlation Coefficient

Collegium Pharmaceutical  WiMi Hologram

Good diversification

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

Pair Corralation between Collegium Pharmaceutical and WiMi Hologram

Given the investment horizon of 90 days Collegium Pharmaceutical is expected to generate 0.25 times more return on investment than WiMi Hologram. However, Collegium Pharmaceutical is 3.98 times less risky than WiMi Hologram. It trades about 0.04 of its potential returns per unit of risk. WiMi Hologram Cloud is currently generating about -0.11 per unit of risk. If you would invest  2,861  in Collegium Pharmaceutical on December 29, 2024 and sell it today you would earn a total of  110.00  from holding Collegium Pharmaceutical or generate 3.84% return on investment over 90 days.

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

Collegium Pharmaceutical  vs.  WiMi Hologram Cloud

Collegium Pharmaceutical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Collegium Pharmaceutical are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Collegium Pharmaceutical is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

WiMi Hologram Cloud

Risk-Adjusted Performance

Very Weak

Over the last 90 days WiMi Hologram Cloud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Collegium Pharmaceutical and WiMi Hologram

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

The idea behind Collegium Pharmaceutical and WiMi Hologram Cloud 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.