Correlation Between Pharmacielo and Hypera SA

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

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

Diversification Opportunities for Pharmacielo and Hypera SA

-0.59

Correlation Coefficient

Pharmacielo  Hypera SA

Excellent diversification

The 3 months correlation between Pharmacielo and Hypera is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pharmacielo and Hypera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypera SA and Pharmacielo 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 Pharmacielo are associated (or correlated) with Hypera SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypera SA has no effect on the direction of Pharmacielo i.e., Pharmacielo and Hypera SA go up and down completely randomly.

Pair Corralation between Pharmacielo and Hypera SA

Assuming the 90 days horizon Pharmacielo is expected to under-perform the Hypera SA. In addition to that, Pharmacielo is 2.85 times more volatile than Hypera SA. It trades about -0.05 of its total potential returns per unit of risk. Hypera SA is currently generating about 0.13 per unit of volatility. If you would invest  306.00  in Hypera SA on December 22, 2024 and sell it today you would earn a total of  64.00  from holding Hypera SA or generate 20.92% return on investment over 90 days.

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

Pharmacielo  vs.  Hypera SA

Pharmacielo

Risk-Adjusted Performance

Very Weak

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

Hypera SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hypera SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Hypera SA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pharmacielo and Hypera SA

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

The idea behind Pharmacielo and Hypera SA 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.