Correlation Between Haleon PLC and BEXIMCO PHARMAGDR

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

By analyzing existing cross correlation between Haleon PLC and BEXIMCO PHARMAGDR REGS, you can compare the effects of market volatilities on Haleon PLC and BEXIMCO PHARMAGDR 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 Haleon PLC with a short position of BEXIMCO PHARMAGDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon PLC and BEXIMCO PHARMAGDR.

Diversification Opportunities for Haleon PLC and BEXIMCO PHARMAGDR

-0.27

Correlation Coefficient

Haleon PLC  BEXIMCO PHARMAGDR

Very good diversification

The 3 months correlation between Haleon and BEXIMCO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Haleon PLC and BEXIMCO PHARMAGDR REGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEXIMCO PHARMAGDR REGS and Haleon PLC 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 Haleon PLC are associated (or correlated) with BEXIMCO PHARMAGDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEXIMCO PHARMAGDR REGS has no effect on the direction of Haleon PLC i.e., Haleon PLC and BEXIMCO PHARMAGDR go up and down completely randomly.

Pair Corralation between Haleon PLC and BEXIMCO PHARMAGDR

Assuming the 90 days horizon Haleon PLC is expected to generate 0.55 times more return on investment than BEXIMCO PHARMAGDR. However, Haleon PLC is 1.81 times less risky than BEXIMCO PHARMAGDR. It trades about 0.04 of its potential returns per unit of risk. BEXIMCO PHARMAGDR REGS is currently generating about 0.02 per unit of risk. If you would invest  671.00  in Haleon PLC on September 26, 2024 and sell it today you would earn a total of  239.00  from holding Haleon PLC or generate 35.62% return on investment over 90 days.

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

Haleon PLC  vs.  BEXIMCO PHARMAGDR REGS

Haleon PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

BEXIMCO PHARMAGDR REGS

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BEXIMCO PHARMAGDR REGS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BEXIMCO PHARMAGDR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haleon PLC and BEXIMCO PHARMAGDR

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

The idea behind Haleon PLC and BEXIMCO PHARMAGDR REGS 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.