Correlation Between BEXIMCO PHARMAGDR and Haleon PLC

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

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

Diversification Opportunities for BEXIMCO PHARMAGDR and Haleon PLC

-0.27

Correlation Coefficient

BEXIMCO PHARMAGDR  Haleon PLC

Very good diversification

The 3 months correlation between BEXIMCO and Haleon is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding BEXIMCO PHARMAGDR REGS and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon PLC and BEXIMCO PHARMAGDR 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 BEXIMCO PHARMAGDR REGS are associated (or correlated) with Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of BEXIMCO PHARMAGDR i.e., BEXIMCO PHARMAGDR and Haleon PLC go up and down completely randomly.

Pair Corralation between BEXIMCO PHARMAGDR and Haleon PLC

Assuming the 90 days trading horizon BEXIMCO PHARMAGDR is expected to generate 1.05 times less return on investment than Haleon PLC. In addition to that, BEXIMCO PHARMAGDR is 1.81 times more volatile than Haleon PLC. It trades about 0.02 of its total potential returns per unit of risk. Haleon PLC is currently generating about 0.04 per unit of volatility. If you would invest  671.00  in Haleon PLC on September 26, 2024 and sell it today you would earn a total of  239.00  from holding Haleon PLC or generate 35.62% return on investment over 90 days.

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

BEXIMCO PHARMAGDR REGS  vs.  Haleon PLC

BEXIMCO PHARMAGDR REGS

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BEXIMCO PHARMAGDR REGS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BEXIMCO PHARMAGDR reported solid returns over the last few months and may actually be approaching a breakup point.

Haleon PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Haleon PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Haleon PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BEXIMCO PHARMAGDR and Haleon PLC

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

The idea behind BEXIMCO PHARMAGDR REGS and Haleon PLC 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.