Correlation Between Prestige Brand and Viatris
Can any of the company-specific risk be diversified away by investing in both Prestige Brand and Viatris 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 Viatris 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 Viatris, you can compare the effects of market volatilities on Prestige Brand and Viatris 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 Viatris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prestige Brand and Viatris.
Diversification Opportunities for Prestige Brand and Viatris
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Prestige and Viatris is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Prestige Brand Holdings and Viatris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viatris 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 Viatris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viatris has no effect on the direction of Prestige Brand i.e., Prestige Brand and Viatris go up and down completely randomly.
Pair Corralation between Prestige Brand and Viatris
Considering the 90-day investment horizon Prestige Brand Holdings is expected to generate 0.99 times more return on investment than Viatris. However, Prestige Brand Holdings is 1.01 times less risky than Viatris. It trades about 0.01 of its potential returns per unit of risk. Viatris is currently generating about -0.24 per unit of risk. If you would invest 8,499 in Prestige Brand Holdings on December 1, 2024 and sell it today you would lose (24.00) from holding Prestige Brand Holdings or give up 0.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Prestige Brand Holdings vs. Viatris
Performance |
Timeline |
Prestige Brand Holdings |
Viatris |
Prestige Brand and Viatris Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Prestige Brand and Viatris
The main advantage of trading using opposite Prestige Brand and Viatris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prestige Brand position performs unexpectedly, Viatris 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 Viatris will offset losses from the drop in Viatris' long position.Prestige Brand vs. Evotec SE ADR | Prestige Brand vs. Supernus Pharmaceuticals | Prestige Brand vs. Collegium Pharmaceutical | Prestige Brand vs. Regencell Bioscience Holdings |
Viatris vs. Bausch Health Companies | Viatris vs. Tilray Inc | Viatris vs. Takeda Pharmaceutical Co | Viatris vs. Elanco Animal Health |
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 Stocks Directory module to find actively traded stocks across global markets.
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