Correlation Between Ypsomed Holding and Santhera Pharmaceuticals

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

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

Diversification Opportunities for Ypsomed Holding and Santhera Pharmaceuticals

-0.39

Correlation Coefficient

Ypsomed Holding  Santhera Pharmaceuticals

Very good diversification

The 3 months correlation between Ypsomed and Santhera is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ypsomed Holding AG and Santhera Pharmaceuticals Holdi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santhera Pharmaceuticals and Ypsomed Holding 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 Ypsomed Holding AG are associated (or correlated) with Santhera Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santhera Pharmaceuticals has no effect on the direction of Ypsomed Holding i.e., Ypsomed Holding and Santhera Pharmaceuticals go up and down completely randomly.

Pair Corralation between Ypsomed Holding and Santhera Pharmaceuticals

Assuming the 90 days trading horizon Ypsomed Holding AG is expected to under-perform the Santhera Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Ypsomed Holding AG is 1.65 times less risky than Santhera Pharmaceuticals. The stock trades about -0.12 of its potential returns per unit of risk. The Santhera Pharmaceuticals Holding is currently generating about 0.59 of returns per unit of risk over similar time horizon. If you would invest  900.00  in Santhera Pharmaceuticals Holding on October 11, 2024 and sell it today you would earn a total of  494.00  from holding Santhera Pharmaceuticals Holding or generate 54.89% return on investment over 90 days.

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

Ypsomed Holding AG  vs.  Santhera Pharmaceuticals Holdi

Ypsomed Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ypsomed Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Santhera Pharmaceuticals

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Santhera Pharmaceuticals Holding are ranked lower than 17 (%) 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.

Pair Trading with Ypsomed Holding and Santhera Pharmaceuticals

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

The idea behind Ypsomed Holding AG and Santhera Pharmaceuticals Holding 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.