Correlation Between Shionogi and Alimera Sciences

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

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

Diversification Opportunities for Shionogi and Alimera Sciences

0.0

Correlation Coefficient

Shionogi  Alimera Sciences

Pay attention - limited upside

The 3 months correlation between Shionogi and Alimera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shionogi Co Ltd and Alimera Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimera Sciences and Shionogi 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 Shionogi Co Ltd are associated (or correlated) with Alimera Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimera Sciences has no effect on the direction of Shionogi i.e., Shionogi and Alimera Sciences go up and down completely randomly.

Pair Corralation between Shionogi and Alimera Sciences

If you would invest  697.00  in Shionogi Co Ltd on December 30, 2024 and sell it today you would earn a total of  62.00  from holding Shionogi Co Ltd or generate 8.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Shionogi Co Ltd  vs.  Alimera Sciences

Shionogi

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shionogi Co Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Shionogi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Alimera Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alimera Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Alimera Sciences is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Shionogi and Alimera Sciences

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

The idea behind Shionogi Co Ltd and Alimera Sciences 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.