Correlation Between Haleon Plc and Dakshidin

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

By analyzing existing cross correlation between Haleon plc and Dakshidin Corporation, you can compare the effects of market volatilities on Haleon Plc and Dakshidin 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 Dakshidin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Dakshidin.

Diversification Opportunities for Haleon Plc and Dakshidin

-0.88

Correlation Coefficient

Haleon Plc  Dakshidin

Pay attention - limited upside

The 3 months correlation between Haleon and Dakshidin is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Dakshidin Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dakshidin 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 Dakshidin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dakshidin has no effect on the direction of Haleon Plc i.e., Haleon Plc and Dakshidin go up and down completely randomly.

Pair Corralation between Haleon Plc and Dakshidin

Considering the 90-day investment horizon Haleon plc is expected to under-perform the Dakshidin. But the stock apears to be less risky and, when comparing its historical volatility, Haleon plc is 11.85 times less risky than Dakshidin. The stock trades about -0.09 of its potential returns per unit of risk. The Dakshidin Corporation is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.08  in Dakshidin Corporation on September 4, 2024 and sell it today you would earn a total of  0.06  from holding Dakshidin Corporation or generate 75.0% return on investment over 90 days.

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

Haleon plc  vs.  Dakshidin Corp.

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. In spite of very healthy essential indicators, Haleon Plc is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Dakshidin

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dakshidin Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Dakshidin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haleon Plc and Dakshidin

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

The idea behind Haleon plc and Dakshidin Corporation 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.