Correlation Between ASPEN PHARUNADR and HANSOH PHARMAC

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

By analyzing existing cross correlation between ASPEN PHARUNADR 1 and HANSOH PHARMAC HD 00001, you can compare the effects of market volatilities on ASPEN PHARUNADR and HANSOH PHARMAC 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 ASPEN PHARUNADR with a short position of HANSOH PHARMAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN PHARUNADR and HANSOH PHARMAC.

Diversification Opportunities for ASPEN PHARUNADR and HANSOH PHARMAC

0.4

Correlation Coefficient

ASPEN PHARUNADR  HANSOH PHARMAC

Very weak diversification

The 3 months correlation between ASPEN and HANSOH is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN PHARUNADR 1 and HANSOH PHARMAC HD 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANSOH PHARMAC HD and ASPEN PHARUNADR 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 ASPEN PHARUNADR 1 are associated (or correlated) with HANSOH PHARMAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANSOH PHARMAC HD has no effect on the direction of ASPEN PHARUNADR i.e., ASPEN PHARUNADR and HANSOH PHARMAC go up and down completely randomly.

Pair Corralation between ASPEN PHARUNADR and HANSOH PHARMAC

Assuming the 90 days trading horizon ASPEN PHARUNADR 1 is expected to under-perform the HANSOH PHARMAC. But the stock apears to be less risky and, when comparing its historical volatility, ASPEN PHARUNADR 1 is 1.99 times less risky than HANSOH PHARMAC. The stock trades about -0.11 of its potential returns per unit of risk. The HANSOH PHARMAC HD 00001 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  197.00  in HANSOH PHARMAC HD 00001 on October 12, 2024 and sell it today you would earn a total of  0.00  from holding HANSOH PHARMAC HD 00001 or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.5%
Values	Daily Returns

ASPEN PHARUNADR 1  vs.  HANSOH PHARMAC HD 00001

ASPEN PHARUNADR 1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASPEN PHARUNADR 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

HANSOH PHARMAC HD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HANSOH PHARMAC HD 00001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ASPEN PHARUNADR and HANSOH PHARMAC

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

The idea behind ASPEN PHARUNADR 1 and HANSOH PHARMAC HD 00001 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.