Correlation Between Santhera Pharmaceuticals and Implenia

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

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

Diversification Opportunities for Santhera Pharmaceuticals and Implenia

0.74

Correlation Coefficient

Santhera Pharmaceuticals  Implenia

Poor diversification

The 3 months correlation between Santhera and Implenia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Santhera Pharmaceuticals Holdi and Implenia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implenia AG and Santhera Pharmaceuticals 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 Santhera Pharmaceuticals Holding are associated (or correlated) with Implenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implenia AG has no effect on the direction of Santhera Pharmaceuticals i.e., Santhera Pharmaceuticals and Implenia go up and down completely randomly.

Pair Corralation between Santhera Pharmaceuticals and Implenia

Assuming the 90 days trading horizon Santhera Pharmaceuticals Holding is expected to generate 2.47 times more return on investment than Implenia. However, Santhera Pharmaceuticals is 2.47 times more volatile than Implenia AG. It trades about 0.29 of its potential returns per unit of risk. Implenia AG is currently generating about 0.14 per unit of risk. If you would invest  784.00  in Santhera Pharmaceuticals Holding on December 5, 2024 and sell it today you would earn a total of  792.00  from holding Santhera Pharmaceuticals Holding or generate 101.02% return on investment over 90 days.

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

Santhera Pharmaceuticals Holdi  vs.  Implenia AG

Santhera Pharmaceuticals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Santhera Pharmaceuticals Holding are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Santhera Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Implenia AG

Risk-Adjusted Performance

OK

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

Pair Trading with Santhera Pharmaceuticals and Implenia

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

The idea behind Santhera Pharmaceuticals Holding and Implenia AG 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.