Correlation Between Small Pharma and Hemogenyx Pharmaceuticals

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

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

Diversification Opportunities for Small Pharma and Hemogenyx Pharmaceuticals

0.0

Correlation Coefficient

Small Pharma  Hemogenyx Pharmaceuticals

Pay attention - limited upside

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

Pair Corralation between Small Pharma and Hemogenyx Pharmaceuticals

Assuming the 90 days horizon Small Pharma is expected to under-perform the Hemogenyx Pharmaceuticals. But the otc stock apears to be less risky and, when comparing its historical volatility, Small Pharma is 6.25 times less risky than Hemogenyx Pharmaceuticals. The otc stock trades about -0.03 of its potential returns per unit of risk. The Hemogenyx Pharmaceuticals Plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,600  in Hemogenyx Pharmaceuticals Plc on October 23, 2024 and sell it today you would lose (1,476) from holding Hemogenyx Pharmaceuticals Plc or give up 92.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	24.24%
Values	Daily Returns

Small Pharma  vs.  Hemogenyx Pharmaceuticals Plc

Small Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hemogenyx Pharmaceuticals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hemogenyx Pharmaceuticals Plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Hemogenyx Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Small Pharma and Hemogenyx Pharmaceuticals

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

The idea behind Small Pharma and Hemogenyx Pharmaceuticals Plc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.