Correlation Between Haw ParLtd and Sanofi ADR

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

By analyzing existing cross correlation between Haw Par and Sanofi ADR, you can compare the effects of market volatilities on Haw ParLtd and Sanofi ADR 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 Haw ParLtd with a short position of Sanofi ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haw ParLtd and Sanofi ADR.

Diversification Opportunities for Haw ParLtd and Sanofi ADR

0.0

Correlation Coefficient

Haw ParLtd  Sanofi ADR

Pay attention - limited upside

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

Pair Corralation between Haw ParLtd and Sanofi ADR

If you would invest  4,873  in Sanofi ADR on December 27, 2024 and sell it today you would earn a total of  577.00  from holding Sanofi ADR or generate 11.84% return on investment over 90 days.

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

Haw Par  vs.  Sanofi ADR

Haw ParLtd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Haw Par has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Haw ParLtd is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sanofi ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sanofi ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Sanofi ADR may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Haw ParLtd and Sanofi ADR

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

The idea behind Haw Par and Sanofi ADR 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.