Correlation Between SIGA Technologies and Viatris
Can any of the company-specific risk be diversified away by investing in both SIGA Technologies and Viatris 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 SIGA Technologies and Viatris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIGA Technologies and Viatris, you can compare the effects of market volatilities on SIGA Technologies and Viatris 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 SIGA Technologies with a short position of Viatris. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIGA Technologies and Viatris.
Diversification Opportunities for SIGA Technologies and Viatris
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SIGA and Viatris is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SIGA Technologies and Viatris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viatris and SIGA Technologies 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 SIGA Technologies are associated (or correlated) with Viatris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viatris has no effect on the direction of SIGA Technologies i.e., SIGA Technologies and Viatris go up and down completely randomly.
Pair Corralation between SIGA Technologies and Viatris
Given the investment horizon of 90 days SIGA Technologies is expected to generate 2.16 times more return on investment than Viatris. However, SIGA Technologies is 2.16 times more volatile than Viatris. It trades about 0.03 of its potential returns per unit of risk. Viatris is currently generating about 0.01 per unit of risk. If you would invest 450.00 in SIGA Technologies on December 1, 2024 and sell it today you would earn a total of 99.00 from holding SIGA Technologies or generate 22.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SIGA Technologies vs. Viatris
Performance |
Timeline |
SIGA Technologies |
Viatris |
SIGA Technologies and Viatris Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SIGA Technologies and Viatris
The main advantage of trading using opposite SIGA Technologies and Viatris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIGA Technologies position performs unexpectedly, Viatris 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 Viatris will offset losses from the drop in Viatris' long position.SIGA Technologies vs. Elanco Animal Health | SIGA Technologies vs. Esperion Therapeutics | SIGA Technologies vs. China Pharma Holdings | SIGA Technologies vs. Halo Collective |
Viatris vs. Bausch Health Companies | Viatris vs. Tilray Inc | Viatris vs. Takeda Pharmaceutical Co | Viatris vs. Elanco Animal Health |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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