Correlation Between Sunshine Biopharma and Shionogi

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

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

Diversification Opportunities for Sunshine Biopharma and Shionogi

0.33

Correlation Coefficient

Sunshine Biopharma  Shionogi

Weak diversification

The 3 months correlation between Sunshine and Shionogi is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sunshine Biopharma and Shionogi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shionogi and Sunshine Biopharma 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 Sunshine Biopharma are associated (or correlated) with Shionogi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shionogi has no effect on the direction of Sunshine Biopharma i.e., Sunshine Biopharma and Shionogi go up and down completely randomly.

Pair Corralation between Sunshine Biopharma and Shionogi

Given the investment horizon of 90 days Sunshine Biopharma is expected to under-perform the Shionogi. But the stock apears to be less risky and, when comparing its historical volatility, Sunshine Biopharma is 6.62 times less risky than Shionogi. The stock trades about -0.07 of its potential returns per unit of risk. The Shionogi Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,512  in Shionogi Co on September 14, 2024 and sell it today you would lose (102.00) from holding Shionogi Co or give up 6.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	64.85%
Values	Daily Returns

Sunshine Biopharma  vs.  Shionogi Co

Sunshine Biopharma

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sunshine Biopharma are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Sunshine Biopharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Shionogi

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shionogi Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Shionogi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sunshine Biopharma and Shionogi

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

The idea behind Sunshine Biopharma and Shionogi Co 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.