Correlation Between Prestige Brand and Pacira BioSciences,

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

By analyzing existing cross correlation between Prestige Brand Holdings and Pacira BioSciences,, you can compare the effects of market volatilities on Prestige Brand and Pacira BioSciences, 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 Prestige Brand with a short position of Pacira BioSciences,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prestige Brand and Pacira BioSciences,.

Diversification Opportunities for Prestige Brand and Pacira BioSciences,

0.41

Correlation Coefficient

Prestige Brand  Pacira BioSciences,

Very weak diversification

The 3 months correlation between Prestige and Pacira is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Prestige Brand Holdings and Pacira BioSciences, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacira BioSciences, and Prestige Brand 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 Prestige Brand Holdings are associated (or correlated) with Pacira BioSciences,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacira BioSciences, has no effect on the direction of Prestige Brand i.e., Prestige Brand and Pacira BioSciences, go up and down completely randomly.

Pair Corralation between Prestige Brand and Pacira BioSciences,

Considering the 90-day investment horizon Prestige Brand Holdings is expected to generate 0.42 times more return on investment than Pacira BioSciences,. However, Prestige Brand Holdings is 2.38 times less risky than Pacira BioSciences,. It trades about 0.05 of its potential returns per unit of risk. Pacira BioSciences, is currently generating about -0.04 per unit of risk. If you would invest  6,181  in Prestige Brand Holdings on August 31, 2024 and sell it today you would earn a total of  2,236  from holding Prestige Brand Holdings or generate 36.18% return on investment over 90 days.

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

Prestige Brand Holdings  vs.  Pacira BioSciences,

Prestige Brand Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prestige Brand Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental drivers, Prestige Brand demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pacira BioSciences,

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pacira BioSciences, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Pacira BioSciences, may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Prestige Brand and Pacira BioSciences,

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

The idea behind Prestige Brand Holdings and Pacira BioSciences, 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.