Correlation Between Cerevel Therapeutics and Halozyme Therapeutics

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

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

Diversification Opportunities for Cerevel Therapeutics and Halozyme Therapeutics

0.15

Correlation Coefficient

Cerevel Therapeutics  Halozyme Therapeutics

Average diversification

The 3 months correlation between Cerevel and Halozyme is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cerevel Therapeutics Holdings and Halozyme Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halozyme Therapeutics and Cerevel Therapeutics 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 Cerevel Therapeutics Holdings are associated (or correlated) with Halozyme Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halozyme Therapeutics has no effect on the direction of Cerevel Therapeutics i.e., Cerevel Therapeutics and Halozyme Therapeutics go up and down completely randomly.

Pair Corralation between Cerevel Therapeutics and Halozyme Therapeutics

If you would invest  4,481  in Halozyme Therapeutics on September 20, 2024 and sell it today you would earn a total of  251.00  from holding Halozyme Therapeutics or generate 5.6% return on investment over 90 days.

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

Cerevel Therapeutics Holdings  vs.  Halozyme Therapeutics

Cerevel Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cerevel Therapeutics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Cerevel Therapeutics is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Halozyme Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Halozyme Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cerevel Therapeutics and Halozyme Therapeutics

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

The idea behind Cerevel Therapeutics Holdings and Halozyme Therapeutics 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.