Correlation Between Teva Pharma and Amexdrug

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

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

Diversification Opportunities for Teva Pharma and Amexdrug

0.0

Correlation Coefficient

Teva Pharma  Amexdrug

Pay attention - limited upside

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

Pair Corralation between Teva Pharma and Amexdrug

If you would invest  0.20  in Amexdrug on December 20, 2024 and sell it today you would earn a total of  0.00  from holding Amexdrug or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Teva Pharma Industries  vs.  Amexdrug

Teva Pharma Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teva Pharma Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Amexdrug

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amexdrug has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Amexdrug is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Teva Pharma and Amexdrug

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

The idea behind Teva Pharma Industries and Amexdrug 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.