Correlation Between Haleon Plc and Novartis
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Novartis 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 Novartis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Novartis AG ADR, you can compare the effects of market volatilities on Haleon Plc and Novartis 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 Novartis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Novartis.
Diversification Opportunities for Haleon Plc and Novartis
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haleon and Novartis is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Novartis AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novartis AG ADR 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 Novartis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novartis AG ADR has no effect on the direction of Haleon Plc i.e., Haleon Plc and Novartis go up and down completely randomly.
Pair Corralation between Haleon Plc and Novartis
Considering the 90-day investment horizon Haleon Plc is expected to generate 2.33 times less return on investment than Novartis. In addition to that, Haleon Plc is 1.06 times more volatile than Novartis AG ADR. It trades about 0.09 of its total potential returns per unit of risk. Novartis AG ADR is currently generating about 0.23 per unit of volatility. If you would invest 9,395 in Novartis AG ADR on December 28, 2024 and sell it today you would earn a total of 1,862 from holding Novartis AG ADR or generate 19.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Haleon plc vs. Novartis AG ADR
Performance |
Timeline |
Haleon plc |
Novartis AG ADR |
Haleon Plc and Novartis Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Haleon Plc and Novartis
The main advantage of trading using opposite Haleon Plc and Novartis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Novartis 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 Novartis will offset losses from the drop in Novartis' long position.Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
Novartis vs. AstraZeneca PLC ADR | Novartis vs. GlaxoSmithKline PLC ADR | Novartis vs. Roche Holding Ltd | Novartis vs. Bristol Myers Squibb |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |